The summer stocktake - Are you sitting on a pile of hidden costs?

The problem is that small-scale inefficiencies in your warehouse aren’t always easy to spot, especially during peak seasons when your priority is fulfilling orders. You may not be aware of how much stock you actually have and how much it’s costing until you come to audit it.

Summer – a period when manufacturing traditionally slows down – is a good time to do this. A mid-year audit will show you the slow movers, overstock and waste you’ve built up so far, and give you an opportunity to shift it ready for busier periods later in the year.

The reason many SME manufacturers end up holding too much stock is because they rely on spreadsheets that have to be manually updated. So, while summer is a great time for a stocktake, it’s also the perfect time to implement a long-term solution to prevent stock from building up throughout the year.

An ERP allows you to move from one-off stocktakes to continuous monitoring, by giving you complete oversight and control of your warehouse, even during your busiest periods. So how exactly can it help?

Real-time visibility of stock

Old and often inaccurate data from spreadsheets won’t tell the whole story, and could lead to poor forecasting and purchasing decisions. Instead, you need real-time visibility of materials and stock so you can keep a close eye on how quickly it’s moving and whether it’s building up. As well as overstocks, live data will also highlight potential stockouts so you can take swift action to deliver your customers’ orders on time and in full. An ERP like Ridder iQ enables staff to easily access this information – which encourages everyone to take responsibility for identifying hidden inefficiencies.

Barcode scanning to reduce complexity

A barcode scanner is one of the most effective ways to accurately record all stock entering the warehouse. Employees simply scan the barcode and the item is added to the inventory – which is visible, in real-time, within the ERP.

Automate purchasing

Manual purchasing processes make it difficult to accurately maintain stock levels. You may end up placing last-minute orders to ensure you meet customers’ requests – but this may mean you end up with more parts and materials than you actually need. This isn’t always noticeable at first. However, over the year it can leave you with excess inventory that is difficult to shift. To avoid stockouts, you might also carry more buffer stock than you actually need, even though it’s costly.

The good thing about an ERP is that it allows you to set a minimum stock level and automatically order inventory, so you have exactly what you need to fulfil orders. Purchasing can be linked to works orders, so you know exactly what you need in plenty of time – and can follow up with the supplier, or choose another, if you are alerted to any delays. Automated purchasing allows you to move towards a leaner ‘just in time’ model, rather than holding onto stock ‘just in case’.

What to do next

Getting on top of your stock is the first step. Once you’ve identified your excess and SLOB stock, you can take steps to remove it from your warehouse. Discounting or repurposing it for sale will bring in extra revenue but even if you have to dispose of it, you’ll still free up space and capital for future purchasing.

By implementing or upgrading your ERP now, you’ll be able to maintain the right stock levels at all times, so the annual summer stocktake becomes a thing of the past.

Find out how Ridder iQ can help you improve your stock management.