Manufacturing companies face many challenges that can affect a businesses’ efficiency, productivity and profitability. Some of these headwinds include inventory and project management, consumerism trends, scaling the business, globalization, increasing revenue and sales and selling direct to the consumer. In addition to these, manufacturers around the world are faced with inefficiencies within the company that may lead to waste, lower productivity and a decrease in profits.
According to a whitepaper by Global Shop Solutions, manufacturing can be affected by “seven deadly sins.” They include, transportation waste, inventory overload, motion waste, increased waiting times, overproduction, over-processing and product defects. To tackle these inefficiencies, organizations must identify and prevent them from impacting business operations.
Excess inventory affects the holding costs of raw materials, work in progress pieces and finished goods. Not only does it increase inventory costs, but this deadly sin ties up capital, takes up space and allows inventory to age and therefore become obsolete. Excess inventory can also suggest issues within the production process.
Deficient forecasting and production planning can often lead to the purchasing of excess material which can be caused by a poorly designed link between the procurement department and the manufacturing and scheduling departments of a manufacturing company.
To address inventory overload, purchasing raw materials only when needed can reduce the need for safety stock and will inevitably minimize waste. Implementing an ERP Inventory software can simplify this process by tracking inventory counts accurately to facilitate the reduction of over or under purchasing.
Additionally, mobile barcode scanning for inventory receiving and movement can help to reduce this type of waste by providing users and departments with inventory visibility and control. It reduces the need for manual inventory and cycle counts, increases accuracy of stock and gives users real-time inventory data which improves productivity and gives insight into when purchasers should order more stock.
Manufacturing waste can be reduced and even eliminated by utilizing the right tools and ERP solutions. Manufacturing organizations should take note of this deadly sin and ensure that the right software is in place to streamline the production and inventory lifecycle.
Global Shop Solutions delves deeper into the seven deadly sins and how you can avoid them, here.
