The days in which excessive inventory buildup was a normal part of doing business are long gone. The focus these days is on lean operations, and inventory reduction is a vital part of lean activities. Building unnecessary inventory levels is often considered one of the seven deadly wastes as far as lean activities are concerned.
Inventory reduction, however, does not mean running out of product. Instead, proper inventory management involves having the right product at the right place at the right time. In order to make this happen, there must be a focus on upstream activities to get the material processed in the right sequence and in the right quantities. Each operation, therefore, is to view the next operation as its customer.
If lowering your inventory levels is one of your goals, there are two ways of achieving it: the hard way and the easy way. Doing it the hard way means there is little interaction between functional areas. This makes it difficult to coordinate activities that will ensure the product flows smoothly throughout each step in the operation. Instead, as inventory levels are lowered, problems in the operation arise. Until an answer to the problem is derived, inventory levels are temporarily elevated again to keep the operation going. This cycle goes on and on for what seems like forever. In the meantime, stress levels rise, and inefficiencies in the operation are brought to light. Excessive inventory levels can actually hide a lot of inefficiencies.
The easy way to lower inventory and effectively manage it to ensure all aspects of the operation continue to flow smoothly is with a good inventory management software package. Places like itsystems.com, which is the site for Infotech Systems, Inc., describe management software that can be utilized to handle inventory levels.
A good software package can be used as a tool to schedule production. As components are used, the system will trigger activities that replenish them. It can be used to integrate everything from the purchase of raw materials to the shipment of the finished product. It provides transparency within all functional levels, thereby preventing problems that can arise as a result of communication breakdowns between departments.
Inventory management software can also eliminate a lot of mistakes that were the result of data entry errors. Rather than typing in part numbers, lot number or quantities, workers can simply scan a system-generated bar code, eliminating the need for manual input. Consequently, inventory accuracy is enhanced.
If you are looking for ways to make your operation more efficient while reducing the amount of stress you face on a daily basis, you should look into a systematic way to manage your inventory.