Manufacturing is an integral part of business. Producers craft sterile medical supplies to save and extend lives, make food that lines the aisles of supermarkets, and create light bulbs that light homes and streets around the world, among many other functions.
With today’s globalized economy, manufacturers can source the cheapest, highest-quality inputs from anywhere, helping contribute towards lower prices and increased competition. Similarly, computer programs have caused these businesses to remain cost-effective without cutting quality. It’s not always easy to keep inventory in topnotch shape and prevent unnecessary waste, but these three tips should help.
Don’t Settle for Subpar Inputs
Seeing as today’s commercial marketplace is quite competitive, businesses often find solace in the tiniest of discounts, which afford them competitive advantages over other organizations. A strategy often employed for reducing costs is through retaining business relationships with the same suppliers for years on end, only leaving in cases of shutdown or shortage.
If you stand by a supplier through good and bad times, it will show them your loyalty and they will be more likely to negotiate favorable payment terms and give you special discounts. These are just some of the perks that come from this type of arrangement. It also helps to know that you can depend upon their stability to allows deliver the goods on time and in the right quantities because they’ve proven themselves so many times before.
However, a disadvantage associated with these long-standing business relationships is the potential for providers to ship out goods made of sub-par quality, hoping their buyers won’t switch to another provider that adheres to modern workplace requirements. They can also get lazy, taking your business for granted. A little healthy competition is definitely called for to remedy this situation.
An effective way of preventing the receipt of insufficient quality inputs is to shop around, testing suppliers like E-Plas not just from the surrounding region or nation, but around the entire world. Look online or search through catalogs to find suppliers of low-cost, premium inputs to prevent waste and aging inventory.
Implement New Management Systems
Businesses of yesteryear were faced with manually recording inventory levels, waste, and manufacturing information, often resulting in incomplete sets of data and inaccurate inferences from crunching numbers. Trying to guess how much inventory you have on hand and how best to use your limited resources often leads to disastrous consequences.
Today, computers help businesses – along with every other organization in the world – keep quality levels high, reduce inventory shrinkage, and reduce excessive piles of waste. Warehouse managers can use historical data on sales, orders, and transfers to spot areas for improvement and opportunities that otherwise would have gone unnoticed.
You can automatic reorder points, turnover ratio calculations, barcode scanning, and other advanced tools to save time and increase data accuracy. Automatic reorder points tell you when to reorder specific items that are getting low. Your turnover ratio tells you how many times you have sold everything in your inventory over the course of a specified period of time, and you can determine if it’s too high, too low, or just right. Barcode scanners reduce the danger of manual data entry when performing cycle counts, picks, and other essential inventory management tasks. You don’t have to worry about making typos and you can even eliminate the need for double data entry by integrating your inventory management software with other solutions, such as QuickBooks.
Just-in-time inventory management systems involve ordering raw materials and other inputs only when absolutely necessary. Often shortened to JIT management, this strategy is best facilitated through modern inventory control systems.
Plan for Equipment Failure
Modern equipment helps businesses stay competitive, reducing waste and keeping quality consistent. This is true of manufacturers, wholesalers, online retailers, and many other types of business. Car manufacturers use robots on assembly lines to make sure every vehicle they produce is of the same caliber. Wholesalers use forklifts and all sorts of other heavy-duty equipment to transport inventory and keep their operation running smoothly. And Amazon uses an army of robots to store and ship items in a timely manner.
At one time or another, equipment will invariably fail. Things wear out. So you need to be prepared for this eventuality. As such, it’s important to create protocols for repairing broken equipment, having other devices to use, and understanding where employees should go immediately following breakage.
Having a backup piece of equipment can work in some cases, but in others a single inoperable piece of machinery can hold up the whole assembly line. Have professionals on hand who know your machinery inside and out. Train employees on how to repair equipment, and run regular drills to be prepared for repair jobs. Even when things go wrong, you can keep your cool and know that it won’t last long because you have spare parts and experts on hand to deal with the situation. You can’t plan for everything, but just do your best.
Conclusion
Businesses cut costs wherever possible to beat out competitors. One facet of cost cutting involves keeping quality high and excess waste low. Every business can employ these three strategies, keeping customers happy and staying competitive all the while.