Step into the warehouse of any expanding manufacturing firm, and what you might see could be frustrating. The computer system displays that 100 units of the finished product are available for dispatch. However, when the picker gets to the allocated bin, only 60 pieces are present. The remaining 40 are phantom inventory. Such a situation is one of the major problems experienced by manufacturing firms across the globe. It affects both profitability and customer confidence. However, why does finished goods’ inventory have such inaccuracies?
The Major Cause of Such Inaccuracies
Human Error: Manual Data Entry: The leading cause of inaccuracy can be attributed to human errors. For instance, after producing a particular number of a product, the worker responsible types of the figure manually either in a spreadsheet or an old computerized system. Typing “100” instead of “10” distorts the entire record.
Late Reporting: In most traditional systems, there is considerable time between the moment the product is manufactured and the moment the product is entered in the system. In case the sales force examines the inventory at such a time, they would probably end up promising a customer a product that is not entered into the system yet or even selling a defective product.
Silo Systems: When the manufacturing process, warehousing, and the sales process are running on separate systems, there is bound to be data loss. For instance, the manufacture of the product could be confirmed on one system but the other system, used by the shipping department, could never be informed.
The Huge Cost of Bad Inventory Information
Bad information about the quantity of finished goods is not only a hassle; it is a huge cost. It results in stock-outs that upset the customer into going somewhere else. But, at the same time, it results in overstocking. Overstocking causes the tying up of the much-needed working capital in unsold inventory. Also, it means spending lots of time reconciling the end-of-the-month physical inventory count.
Solution: x2x Lite Manufacturing
Elimination of phantom inventory requires the elimination of guess work and manual systems. That’s where x2x Lite Manufacturing helps.
Real-Time Visibility: With x2x Lite Manufacturing, once the finished good is marked as completed, the update takes place right away. Everyone will be viewing the same information, no matter whether it’s the Sales, Warehouse or Management department.
Seamless Integration: Unlike other systems that have separate departments, with x2x Lite Manufacturing, the production floor is directly linked to inventory and sales modules. Upon completion of the order, the finished goods will go into the proper warehouse area without extra data entry.
Barcode Scanning Option: Due to barcode scanning functionality implemented by x2x Lite Manufacturing, you won’t need a keyboard anymore. The finished good updates automatically. No human errors, faster time from receipt to shelf placement, and a clear audit trail, everything is taken care of.
Accurate Waste Calculation: In case of damaged units during the final quality check, x2x Lite Manufacturing provides you with an opportunity to change the quantity of the finished goods on the spot, considering the waste.
Conclusion
It is not possible to make an efficient and successful manufacturing business based on unreliable numbers. When your inventory levels of finished goods are always out of place, then it is high time that you gave up your use of spreadsheets and non-integrated software. With x2x Lite Manufacturing, you will be able to believe in your figures, utilize your warehouse better and satisfy your clients perfectly.
