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Physical Inventory Optimization

Optimization of Physical inventory count        

    Inventory Management accuracy is the goal of each company. By optimizing inventory and inventory accuracy, scheduling and promises to set out to buyers and customers will work without errors and efficiently. However, there are always problems with accuracy in inventory that companies need to work with and run their businesses. However, this does not need to be the case, these issues can be solved by optimizing Physical Inventory Count.

            So, what is physical inventory count? A physical inventory count is a planned approach to counting a company’s stock in which staff uses a predetermined system to count stock. These physical inventory counts are scheduled by companies at the end of a reporting period that is pre-set. There are four main types of physical inventory counts which are manual, electronic, cycle counting, and full inventory counting. Choosing the right method depends on the company and the data that it holds and choosing the right one is what defers good data from bad data for the company. Manual completion uses paper count cards to record inventory, electronic counting counts use scanners, RFID, barcodes, and mobile devices to complete the task. Cycle counting uses staff to count random portions of the inventory at any given time of the year. Full inventory is when companies use staff to count all the stock of the warehouse at one time.

            Physical inventory counting is not always automated. Automating this process eliminates all human error and enables real time while providing accurate and useful data. The most accurate method to optimize physical inventory count is a combination between cycle counting and automation. Companies usually perform an annual physical count which is not the most accurate way and does not provide the best results.

            There are many benefits to physical inventory counts, these inventory counts are essential to optimize inventory records and keep them updated and accurate. These exact records provide better forecasts for sales and purchases and it guarantees that you have the proper amount of inventory on hand. Physical inventory counts are necessary to increase profits and benefit you and the customers. Customer satisfaction is the most important thing and having updated inventory levels ensures the completion of the order in the quickest way and ensures customer instant gratification. Physically counting inventory can ensure you understand and are able to plan for losses or decreases in revenues. These losses can come from multiple places like theft or items remaining in stock and making them lose value. Performing these physical inventory counts can improve profits overall by reducing liability.

            So, how do we optimize physical counts and how can we prepare for them properly? The best way to achieve a successful inventory count is by performing a detailed planning for it and optimizing it. Companies need to perform a comprehensive policy to decrease unknowns and update physical counts. To improve accuracy companies, need to use scanners and barcodes or other counting technology to keep track. For physical counts companies need to select or hire certain staff that are attentive counters to count stocks and be accurate and a mock count should be done during the planning phase. Also, discrepancies should be taken care of immediately. The cost of items should not be displayed in the count because counters can be lost while doing the count and it is not professional. Operations and sales should be stopped to increase accuracy while performing a complete physical inventory count. Staff that are on sight during the full physical count should only be there for the count to not distract counters. The warehouse or stock area should be secured on the day of the count to ensure accuracy and get rid of all distractions. Finally, certain Inventory Software and inventory management systems should be used to secure that the count is accurate and optimized to the fullest.

            What is the purpose of the physical count? A physical count can ensure accurate inventory tally. Staff count physically each piece of stock. This physical count should represent the same data that the inventory management software report. If these physical counts do not confirm the data of the software then the company should be alerted for any other issue. These physical inventory counts are not only for counting stocks, they are also for performing balance sheets and many other uses such as checking and balancing inventory levels. Another use is monitoring and managing thefts. The difference between the physical count and the data in the software can be due to missing, stolen, or broken items. Also, it helps plan and create an accurate budget for next year’s inventory orders and increase revenues by optimizing stocks. Finally, reporting accurate earnings because inaccurate inventory levels can lead to incorrect reporting of net income and sales.

            After completing the optimized and accurate physical count, you are set. But for how long? Each business should decide how often to conduct a physical inventory count; it all depends on what fits their timeline and their operations and the count of their stocks. Some companies see it fit that retailers do physical counts twice a year, others find that an annual or a cycle count method works for them best. During the off season, or when sales are low based on the forecasting, companies can check their inventory management reports in their enterprise resource programs to see how inventory is tracking and changing based on the reports. Cycle or spot counts can be used as a complement to a full physical count when inventory rotates often and frequently. It is encouraged that perishable or expensive items must be checked on frequently to ensure the product integrity and to get rid of any expiring product.

 Physical inventory counts are an important part of inventory management which are necessary for most if not all businesses that have tangible products. Physical inventory count is important, but it can be useless without having the proper inventory management system. This is why adopting these techniques with a proper inventory management system that has advanced features like automation can help optimize the growth and advancement of the company.

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Product Recommendation in 2021

           What is product recommendation? Product recommendation is a strategy used as a filtering strategy which aims to predict and show items to users based on what the user would like to purchase based on their previous purchase history and the time of the year to tailor the product for the user. It's not always the most accurate, but if you see something you like then the system is doing a good job.

           These recommendation systems have been part of Inventory Systems and are increasing in popularity in the last couple of years. They are used in many different areas and fields. The recommendation systems are used in the digital domain mostly, especially in E-commerce websites like Amazon, AliExpress, Alibaba, etc. These E-commerce websites use these recommendation systems to better the experience of customers and better serve them by suggesting products they would like based on many metrics such as the time of the year and previous purchase history. If these systems are set up and configured properly, it can increase revenues and other important metrics. They also improve user experience which is important for online businesses because it will enhance customer satisfaction and the user would likely return to the website.

           All these improvements to online businesses can be achieved by using a proper recommendation engine. These systems are data filtering engines that use algorithms and data to recommend items to users that are most relevant to them. These automated processes will not only show you products that you want but also it will show you other products related to the ones you are buying.

With all the information present online and with the increasing number of users, it is becoming more important for businesses to provide relevant information and products to the user based on the user’s taste and preferences. These algorithms learn from each product the user purchases and views. 35% of Amazon’s revenue comes from its recommendation engine. So how do they do it? What’s their strategy? Amazon uses recommendations as a targeted, marketing strategy. Amazon will recommend products from different categories based on your browsing history; therefore, when you open an E-commerce website you always get on the front-page products that you are interested in.

What are the different types of recommendation systems?

Looking for a proper recommendation system can be difficult. Therefore, you should tailor the system based on your needs and wants. There are three main types of systems: collaborative filtering, content-based filtering, and hybrid recommendation filtering.

First, collaborative filtering, this method is based on collecting and analyzing data and information about a user’s behaviors, preferences, and recent activities and using this information in order to predict what they would like to buy based on their similarities with different users. Collaborative filtering does not use machine analyzable content therefore, it's capable of predicting and recommending a movie without understanding what that movie is. This type of system is based on a simple idea and assumption which is that if people agreed in the past, they would agree in the future. An example to better understand the way it works is if person 1 likes items A, B , and C and person 2 likes items B, C, and D then these 2 people have similar interests so the engine can recommend person 1 item D and it can recommend person 2 item A. Furthermore, Collaborative filtering can be subcategorized into 2 main strategies. First one being User-User filtering, here the system or algorithm searches for people with common interests and similar purchase history. Then the system will automatically recommend and offer products to one of the individuals which his or her lookalike purchased and liked like the example given above. The downside to this engine is that as the number of the customers grow and the number of items increases in the Inventory System the more difficult it is for the algorithm to find matches. The other strategy which is used by Amazon is called Item-Item filtering. This algorithm tries to find item lookalike instead of a customer lookalike. The customer will get recommendations that look like items he or she have previously bought. This system requires less resources than the User-User filtering which makes it more practical and more accurate for businesses to use.

Second, is Content-based filtering, which is based on the description of an item. Using content-based filtering, certain keywords are used to describe items; other than that, the user is required upon signup to state his or her interests. This means that the algorithm will try and recommend items like the ones you have already bought. There is a major issue with content-based filtering is that the algorithm can only learn one trend for the user and try to replicate it and suggest similar items. The value of the system decreases in this case because it can only recommend items from the same category and type.

Finally, the hybrid recommendation system which is a combination of both collaborative and content-based recommendation which can be more useful and effective based on research. This approach is implemented by making content-based and collaborative based recommendations separately and then combining both findings. Studies show that this approach provided the most accurate recommendations. This approach is useful because it avoids the problems present in the other systems such as a cold start and the data paucity problem.

All the above recommendation systems take into consideration the time of the year or season we are in to make these recommendations more accurate. For example, if you use Netflix you will notice that at the end of the year it starts recommending Christmas movies or if you use Amazon it will recommend Halloween costumes when Halloween approaches.

In conclusion, there are a lot of technical explanations needed to understand how these automated systems work through different means and the application of machine learning. However, users mostly focus on the quality of the product and the recommendation they are getting because these are the things that will attract customers. This is why having a proper product recommendation system is necessary.

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Personalization and inventory control in 2020

In inventory management, a business’ goods are incredibly valuable. A business cannot just acquire inventory, a company needs to store, safeguard, and finally manage these inventories. The problem with these activities is that they are costly, especially if you do not manage these inventories correctly. As the customer expectations rise and the strain on the supply chain increases, effective inventory management will make it an easier process for the company. And of course, not going with these trends of Inventory Management Systems will allow competitors to take an edge over you.  

           When advancements hit the industry, the first thing that is usually targeted for change and improvement is inventory control. Some of the ways to make these changes are by improving demand forecasting, supply chain methods, or any other form of Inventory System automation and integrations. These changes to the industry lead to new trends and can eventually change the face of the industry.

           The first trend we will be discussing is predictive picking through a study using artificial intelligence. According to some companies, it is possible for companies to use artificial intelligence and automation to pick the predictions before the customer presses the “buy” button. Using artificial intelligence and some advanced inventory management systems companies can recognize some buying patterns and predict customer behavior. The use of AI in inventory management systems can help warehouse technologies to navigate these warehouses in a more streamlined way.  

           Another trend is focusing on omnichannel inventory management solutions. Companies using omnichannel retailing are at the top of their game because they attract most consumers who use 3 or more applications on a daily basis. With sales and profits coming in from different sources and channels, this poses a serious responsibility on the inventory control system. And, this is where an omnichannel inventory management system comes in place. To manage this responsibility, companies now include inventory control through multiple channels. Using an advanced inventory management system companies can use advanced data to control the supply chains, distribution channels, and avoid stockouts. It is difficult to work through multiple channels so here are three solutions to simplify this process. First, you need a stable safety stock level in order to reduce the risk of stockouts. Second, the company needs to have more distribution centers because the more channels you have the more distribution centers you need to match that level of complexity. Lastly, and most importantly, the company needs to have a proper and advanced inventory management software that alerts the company’s operators about stock levels. The system can also run forecasting reports in order to better understand the product demand for the future.   

           Another important trend is increasing personalization and how it impacts inventory control. Personalization is more than just knowing the name of your customer. It is also about knowing their purchasing habits, helping them to discover new products, and finally creating a unified and seamless user experience based on previous activity. This trend was implemented by Amazon and saw tremendous success. It was shown by studies and reports that around 35% of online retailer’s sales were due to the recommendation algorithm. User data can be very beneficial and can boost sales for a company by a significant amount. However, this requires a proper inventory management system that can take the data from users and their previous purchases. 

           Finally, the last trend is managing returned inventory. Consumers return 20 to 30 percent of goods that were purchased online, however, less than 10 percent of goods that were bought in store. With the rising popularity of online shopping and the increase in individual package shipments, instead of selling in bulk, there will be huge problems in the inventory management systems. With companies offering free returns, the problem of returns can cost the company a lot of money and not offering this can lead to customers turning away from your online store. Therefore, an advanced management system is needed in order to manage returns. The system needs to be able to manage returned inventory without causing any problems to the supply chain. For example, undamaged products should return to the warehouse and be sold again, while a broken item can be thrown out and considered waste. 

           In conclusion, there are certain inventory management and control trends that can lower costs and allow for higher profit margins while also keeping your stock safe and in good condition. This is why a proper inventory management system is helpful. Moving from a single channel to an omnichannel can make the shopping experience more immersive. The way retailers handle inventory must change according to the ecommerce experience. By studying and applying new concepts and trends, any company can adopt the right technology to apply a seamless inventory management process.

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Inventory Forecasting in 2020

What is Inventory Forecasting?

                In Inventory System, Inventory forecasting is a method used in predicting inventory levels for a certain period in the future. It is also helpful for tracking demand and sales in order to manage your purchases. Forecast inventory management tools can increase a company’s profits and revenues while also decreasing costs on the company. There are certain benefits of forecasting inventory for every business.

The first benefit of Inventory forecasting is minimizing stockouts. This is important because stockouts will lead to losses in sales and revenue. Accurately forecasting inventory will help business avoid stockouts by predicting future demands for your products. Accurately forecasting will help the company know when to restock and how many units of product they will need to reorder.

            Another benefit of forecasting inventory is that it reduces inventory holding costs. Inventory forecasting helps with inventory management in general. It helps with managing storage places for your products because the company will only need to buy stocks as much as needed and stock only these products instead of ordering excess stocks. Ordering enough stock without any excess amount will lead to the company to rent out less space to store their inventory which reduces costs that were needed to rent out the extra space.

            Finally, forecasting inventory will help you assess your products and which products are not selling or selling slower than expected. This will help you assess what to do with these items and how you can bundle them with other products. This will increase revenues by selling unwanted items and reducing holding costs after removing them from your warehouse.  

Calculating inventory forecasting

        Inventory forecasting uses certain factors in order to calculate and predict future demands and required stocks in order not to go into stock outs or have any excess supplies. The factors required are lead time demand, sale trends, reorder points, and safety stock.

            Lead time demand is calculated by multiplying average lead times in day with average daily sales. Lead time is the amount of days it takes your supplier to fulfill the shipment and deliver the stocks to your warehouse. Predicting the product demand during this period will help companies avoid stockouts. This is lead time demand. Without calculating the lead time demand you will risk going off stock while you receive the new shipment. The average lead time is calculated by looking at past shipments and how long did the vendor take to deliver the shipments. Average daily units sold can be calculated from previous data by calculating the average amount sold per day.

            Sale trends refer to the decrease or increase in sales over a certain period. Your business can specify which product to analyze. A micro sale trend focuses on a certain product over a few weeks. On the other hand, we have macro trends. Macro trends focus on a range of products over a longer period and larger time frame. These trends inform your company about certain buying patterns in the past, so you do not run into stockouts.

            Another thing that must be calculated is the reorder point. The reorder point is the specific level in which a company needs to restock its inventory. This means it tells you when to reorder a certain product to avoid stockouts. The reorder point should not be static, it should be variable. It should vary based on previous forecasted sale trends. The reorder point should be updated frequently during every sale season. The reorder point is calculated by multiplying your average daily sales with lead time and adding the result with safety stock.

            Finally, safety stock is the extra quantity that the company stores of a product in its storage in order to avoid stockouts. Calculating safety stock is very important because having excess safety stock can lead to higher holding costs and having insufficient safety stock can lead to loss in sales. Safety stock acts as an insurance in case of fluctuation in demand. Safety stock is calculated by multiplying maximum daily sales by maximum lead time then subtracting the product average of daily usage multiplied by average lead time. Safety stock covers you until the next shipment arrives which can be of added benefit in case of a stockout.

Forecasting Methods

        Forecasting models are drawn from certain upward and downward trends in demands from consumers. The model you choose, and its accuracy will influence your company’s profits. Some of the most common forecasting techniques are Trend, Graphical, Qualitative, and Quantitative forecasting.

            First, trend forecasting, which is a method that uses market growth data and past sales to determine future sale trends. The downward and upward trends are calculated for particular products and the demand is forecasted based on these trends. These trends help determine the future sales of these products and the company modifies its inventory management technique based on the results.

            Second, Graphical forecasting, which is a method that converts previous sale data into a graph form which will help the company analyze sale trends visually and more effectively. The crests and troughs in these graphs can help identify previous inventory trends and patterns helping the company forecast inventory easily.

            Third, Qualitative forecasting, which is a method adopted when previous and historical data are not useful or available. It involves predicting demand on potential economic demand and current demand.  Inventory management experts use this method repeatedly over a certain period of time. This method uses feedback, personal instinct, research surrounding the market to forecast. This works well for new businesses that have no previous data and are looking to introduce a unique product to the market.

            Finally, Quantitative forecasting, which is a method that is usually more accurate than previous methods and models because it uses previous sale data to predict future demands. This model works best for established businesses. It can be based on the previous quarter or even multiple one. The more data included in the model the more accurate the forecast is.

Forecasting inventory is a necessary step for every company trying to grow. It helps predict future demands and decreases losses on companies and businesses. It can be implemented to the company’s inventory management system and usually a proper Barcode Software includes this feature. Forecasting helps optimize your inventory and manage things better.

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The Best way to Implement Safety Stock in 2020

What is Safety Inventory?

        Safety Inventory also known as Safety stock is any additional quantity of a product or item that the company holds in its inventory for it to reduce the risk that this item will go out of stock. Safety Inventory is important for the Inventory System and acts as a buffer in case an item’s sales exceed expectations and the suppliers are not able to deliver additional goods at the expected time. Safety Inventory for materials and products decreases the chances of the production chain being disrupted by an unexpected increase of sales and it keeps the chain going smoothly. Even though at first sight Safety inventory can be considered as extra costs for the company, these holding costs for the safety inventory are actually less than the costs  of not fulfilling an order on time or having to disturb the regular production plan that the company follows.

Importance of Safety Inventory

        As mentioned above, the main purpose of safety inventory is the elimination of the problem of running out of stock. If you hold enough safety stock, you won’t need to rely on the supplier to deliver quickly or lose the customer due to insufficient inventory. It usually covers your company until the next batch arrives from the supplier. How will it help your business?

First, having safety inventory will help protect the company incase of a spike in demand for the product. Increase of demand on a product is a good thing, however if you do not have any safety stock this spike will have a negative impact on the company instead of a benefit. Safety inventory serves as a cushion or protection in case the product takes too long to ship from the supplier and helps ensure the company does not run from an important item and helps the company on fulfilling orders on time.

Second, even if you work with reliable suppliers, sometimes there is a disruption in the supply chain due to unexpected interruptions in production or transportation of the product from the supplier to the company’s inventory. In case of these delays, safety inventory acts as a buffer and helps fulfill the shipments to the customer on time.

Third, safety inventory helps protect the company from the price fluctuations. In some cases, there are unpredictable fluctuations in the market which can lead to an increase in the price of your product. This can be due to many reasons such as an increase in the price of raw materials, new policies by the government, new competitors in the market, or even unexpected increase in demand. If the company has enough safety inventory then it can protect itself from buying products at higher prices without sacrificing your company’s profit.

How to Calculate Safety Inventory?

Keeping safety inventory is not as easy as hoarding additional products in your inventory or warehouse, it is much more complicated than that. To get the benefits of safety inventory you need to know how much to keep in your inventory. Too little safety stock can result in losses in case of a spike in demand, and too much safety inventory can lead to higher holding costs in the warehouse which in turn decreases profits as well. To keep an optimal amount of safety inventory, a formula will help your company in calculating the required amount of safety stock.

Even though there are multiple formulas to calculate your safety inventory, all these formulas depend on knowing your lead time. Lead time is basically the time between the time between the initiation and completion of a production process.

First, we have the fixed safety stock method in which the amount of safety inventory is determined based on the maximum daily usage over a certain period. Fixed safety stock method, however, does not depend on a formula. It is fixed and based on the decision of the production planner. The quantity is usually fixed unless the planner decides to change the quantity. The downside to this method is that it does not take into consideration the sudden spikes in demand which can cause problems in the future.

Second, is the time-based method. In this method, the safety inventory is calculated based on a time period in which the company bases its decision on the future estimation of sales for the product. This method depends on two main points which are the actual demand on the product and the estimated future demands based on statistical approaches. The downside to this method is that it does not predict uncertainties for the business, using this method involves a risk in carrying unwanted inventory incase the sales are not moving as forecasted.

Third, the general formula is the simplest and the commonly used way to calculate safety stock. Basically, it calculates the average safety inventory that the company needs to hold in case they run out of stock. The downside is that it does not take into consideration the fluctuations in demand based on the season. The formula is Safety stock = max daily usage x max lead time – average daily usage x average lead time.

Another method is applying the Heizer & Render formula. This method is ideal when there is a significant difference in supply from the retailer’s end.  It gives the company a more accurate picture of the lead time and how often the company deals with late shipments. The downside to this formula is that it does not take into consideration the fluctuation in demand. Safety stock is calculated using this formula by multiplying the desired service factor or the Z score by the standard deviation in lead time. 

Finally, the last method is Greasley’s formula. Greasley’s formula takes into consideration demand fluctuation and lead time. It provides a more accurate way of calculating safety stock. The downside to this method is that it does not take into consideration the stock that is still in production. Safety stock is calculated using this formula by multiplying average demand with the desired service factor, or the Z score, and the standard deviation in lead time.

Calculating safety stock accurately is very crucial for any company’s reputation and helps the company avoid losses. It protects companies from going out of stock in case of sudden spikes in demands or any interruption in the supply chain. There is no one size fits all for the implementation; it depends on the business you are running. However, the most suitable way to calculate safety stock is by automating the process and making it be part of your inventory management system.  Automating the process, with this System, helps because it removes human error and gives more accurate results to establish a proper safety inventory management.  

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Implementing a Just In Time Inventory System in 2020

What is Just-In-Time Inventory Management?

Just-In-Time inventory management also known as JIT is an inventory strategy used to increase efficiency. Using an Inventory System and Just-In-Time inventory management involves ordering and receiving inventory for production and sales only as it is needed to produce goods not before.

Using a Just-In-Time inventory management strategy means ordering inventory on an as-needed basis and the company does not hold any safety stock and is always operating on low inventory levels. JIT inventory management is a strategy used to reduce costs; however, it can also lead to stockouts. The goal of Just-In-Time inventory management is to increase the company’s return on investment by reducing unnecessary costs. JIT inventory systems represent a shift away from the ordinary and mostly used strategy “just-in-case”, in which companies and producers carried large inventories of stocks and goods incase of increased demands which in turn increased costs on the company and decreased returns when compared to JIT.

Just-In-Time inventory management offers advantages because it allows manufacturers and companies to keep production runs short and move on to new products quickly and easily without holding unwanted stock and batches in their inventory. Companies no longer need to have a huge warehouse to store their inventory or spend large amounts on raw materials needed for production because they only order what they need and not more. This decreases the manufacturing costs which will lead to increased cash flow that can be used for other usages.

JIT inventories on the other hand can cause disruptions in the supply chain. It only takes one supplier of the raw goods to have a breakdown to shut down a manufacturer's entire production process. Also, if a customer order for goods surpasses expectations it can cause shortages and delay for all products in delivery.

Benefits of Just-In-Time Inventory Management

            Overproduction is highly undesirable in most businesses if not all of them. Overproduction occurs when demand is lower than the supply in the market. Overproduction leads to the accumulation of unsaleable inventory and dead stocks that take up unnecessary space. Implementing Just-In-Time inventory management helps ensure that there is a reduced number of unsalable products which cuts inventory wastage.

            With a Just-In-Time inventory management goods are only ordered when the consumers and customers make a purchase of that good. This decreases the need to stock up on unnecessary inventory in your warehouse. This means that you can reduce the size of the warehouse or even eliminate the need for a warehouse completely which reduces costs on the company.

            Due to the fluctuation in market demand manufacturers need to stay focused and analyze the market to decide if they need to increase or decrease production. Just in time inventory management gives manufacturers more flexibility and control over the production of their products and goods. JIT will allow manufacturers to deal with the problem of having unusable and unsalable inventory, and they will be able to adapt to the changes in the market quickly and efficiently.

            For businesses using JIT inventory management, local sourcing is the best way to implement an agile production process. Using Local sourcing brings in several additional benefits to the company.

            The just in time inventory management system requires strict adherence to routine maintenance schedules to avoid any problems in the supply chain. Preventative maintenance of equipment allows manufacturers and companies to avoid machine breakdowns and any additional unwanted costs due to breakdowns.

            The just in time system also encourages skilled workers, flexible workspace and an atmosphere of collaboration. These things enhance the production and help the company maintain a competitive edge by searching for ways to improve its products while achieving a more efficient operation and eliminating added costs that have no return value.

The JIT system also encourages stronger relationships between suppliers and manufacturers. Communication and information between the supplier and manufacturer are open. These relationships are improved by long-term contracts.

Using the JIT system, automating the purchasing of supplies and goods is recommended. If goods are required, suppliers will get automatically notified. This increases efficiency and reduces time consumption. Automating purchases means that inventory and production levels are automatically calculated which in turn makes things more efficient.

Using a JIT system approach suppliers working with will be limited. This decreases the amount of time spent on creating vendor relations and ensures that you only work with suppliers that are reliable and that can deliver on time a high-quality product.

Key Features

The situation and circumstances of each business differ based on their day to day operations. This System makes it possible for businesses and companies to work while storing the minimum amount of inventory needed to operate.

Having a barcoding component can help solve human error which is a result of manual data entry. Barcodes offer quick, reliable solutions while saving significant time and resources that would have gone to waste with manual entry. These are key components of JIT inventory systems because they help with efficiency while reducing costs. Barcode scanning can help track the inventory needed without having excess unwanted inventory.

 Businesses usually lose money or profits due to overstocks, returns, or even if they are out of stock. Going out of stock might be a problem if you are implementing a JIT system without having the proper management tools and inventory alerts. Your JIT system can solve this problem with its inventory alerts which gives the manufacturers an alert of going out of stock or any returns to fix the problem directly. Having inventory alerts in real time will lead to quick problem solving and improved operation control which are two very important criteria of JIT systems.

Conclusion

       The Just In Time requires businesses to be agile and with the capability to handle and work with a very short production cycle. If your product can be manufactured and supplied in a very short time, you have reliable suppliers and vendors that you work with, do you have a good team that understand the supply and demand chain based on the seasonal fluctuations on sale, while also having the flexibility to update data in real time, then having a Just In Time inventory system will suit your business or company best.

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Batch tracking inventory systems and their importance in 2020

What is Batch tracking?

In  Inventory System, batch tracking is the ability to group and monitor a set of items or stock that have and share similar properties. Batch tracking systems allow you to properly track product batches along the entire chain of supply. This means that you can track the batch from the manufacturing point until it passes through the supplier and reaches the end customer. Batch tracking allows organizations and companies to keep track of which end customer received specific batches of items and when did they receive them. Also, the date of purchase and the supplier’s information are also tracked. Batch tracking software allows companies to easily recover information about any batch of products.

            Batch tracking allows products to be traced, end to end, from the manufacturer to the supplier and to the end customer.  This process is used to keep track of which client received specific batches, allowing directors and managers to account for product movement via numerous automated reports. Batch numbers can be given to one or many units of products that are being formed or acquired on different dates and can be tied to an expiration date if valid to that product. A batch tracking system helps automate this process and allows users and managers to track product movements, create a batch report and ease recalls and returns when needed. It allows corporations and organizations to perform batch costing and minimizes the costs linked with a product recall.

            Why is batch tracking important?

         A company works best if the relationship between the manager, customer, supplier, and contributors in the company are seamless and transparent. For this to occur, companies need to easily access and check their stock without any trouble and while eliminating any errors. For this to be possible certain tools are needed and they should be incorporated into the company to view the entire stock with all the needed details. This is where a batch tracking inventory management system  comes into place to ease the work.

                        How can it be beneficial?

            Using a batch tracking system allows companies to use certain strategies. First in first out, also known as FIFO, implies that the products that arrived first, will move out first. Another strategy is Last in First out or LIFO which is mainly used for products that do not have a shelf life. Finally, the last strategy is First Expired First Out or FEFO which is used for products with an expiration date. Which allows goods with the closest expiration to move out first.

            Batch tracking makes recalls, which is an option that manufacturers provide, a quicker and easier process. Consumers realize and understand the importance of recalls, but if a company does a poor job in recalling and replacing a product, the consumer will likely admonish this company due to its sluggish work. As a company barcode tracking will help make the recalling process proactive and easier to replace a product or present a refund if needed. Any business will require and benefit from a batch tracking system that will make it easier to recall products with detailed information of every defective product from the batch.

            One of the most important factors for maintaining high quality products that have an expiration date is knowing that date for every product you sell and allowing the customer to know this information. Having a batch allows automatic expiration of any product and gives the manufacturer the ability to develop a better-quality control system in case of any problem. This will allow you to apply strategies like FEFO mentioned above.

            Another benefit is improved relationships with suppliers. Batch tracking software allows you insight into the quality of the finished products by being able to track the raw materials being used by the supplier. This gives the company and organizations to identify the worst and best suppliers in case they have multiple suppliers. This will give the company a greater control over their product quality and who they will purchase their raw material from.

            Using manual batch tracking in your inventory systems is time consuming and tracking is prone to errors. Inputting incorrect data, omitting, misinterpreting, and misplacing data is easy when data is manually inputted. An automated batch tracking system will allow companies to enter the information that is generated across all products within the batch and puts that information at ease of access.

            Some industries such as in food and pharmaceuticals, the regulatory governing these items have rigid guidelines to follow regarding storage, sales, supply, and distribution. Quality and quantity control are necessary. Batch tracking in the inventory system gives the company transparent data to ease traceability and insights. This system gives you easy visibility to the shelf life and the usability of the items. Batch tracking is necessary for creating a better quality and control system for your products.

            What does this mean to your company?

         Now that you know the benefits of batch tracking in your inventory system, it's time to consider if your business or the company that you work for needs one and is ready to move from traditional methods like manually inputting the data and movie into  more advanced methods like automated batch tracking systems. Companies are usually very busy and don’t have enough time to keep track of all these things without the help of a System. In order to optimize processes and maintain quality and quantity of their product, companies shouldn’t take shortcuts in terms of developing products and building relationships with their customers. They should find a time efficient and a more accurate way of doing things. Batch tracking inventory systems allow us to do so. Using batch tracking systems will allow us to track expiration, improve relationships with suppliers and customers, improve individual product identity and traceability, implement faster and more efficient product recall, and enhance business insight and analysis through removing human and manual tracking which were traditionally used.

If your business or company will benefit from these things then a batch tracking is the perfect solution to solve these problems.

[walidkassar]

Automating Asset Tracking in 2020

Definition of Asset Tracking

           Each company has physical assets. You may have more than you realized and have excess or on the other hand you might find yourself having less than you needed in times when these assets are required which might lead to multiple problems. Therefore, every company needs to track their assets in a proper way. Asset Tracking is just as important as managing your inventory because it is necessary to know the location, maintenance schedule and status of your physical assets.

Methods to Track your Assets

           Although asset tracking can be expensive and time consuming, there are methods that can save money and time for your company or organization. The goal of these tracking systems is to minimize equipment loss and to maximize asset control efficiency. In order to reduce downtime and enhance production planning organizations can use Barcode Tracking labels, handheld barcode scanners, mobile computers, RFID tracking, GPS asset tracking, and other methods to track assets in real time. Proper software also enables organizations to schedule necessary maintenance or prevent maintenance for some of the assets. Barcodes are the standard way to track assets, due to the ability of giving each asset a unique code to be recognized individually. These barcodes include information critical to each company like product name, category the asset belongs to and other information. They also help companies count assets more accurately and decreases the risk of human error.

Benefits of Asset Tracking

           The benefits of asset tracking are numerous. Each company that decides to implement a proper tracking system will notice a healthier environment and reduction in costs. The advantages for asset tracking are numerous. The most beneficial advantages is first improving efficiency and cutting down the costs, while adjusting company records and reassigning different assets to different departments without losing track of these changes. Also, it will be easier to track and locate assets at any time. In addition, the administrative costs will decrease because there will be no need for someone to manually track and locate these assets which will in turn help to reduce asset loss due to the lack of human error. Scaling assets will be easier while growing the company and the customer service will improve due to the improved asset tracking. Other than that, it will increase the organization of physical space while the increasing the efficiency because these systems will help identify which assets are accessed together and group them together to create a better physical system. Finally, it will help ensure accountability incase of asset loss knowing from the system where and when was the asset lost and who was the last person to access it.

 What is Automated Asset Tracking?

                   Asset tracking is the ability to track physical assets using software and asset tracking devices. Asset tracking monitors location, condition, temperature, and time used for these assets. Automated asset tracking takes us a level above that; automated asset tracking archives in your asset system all your data and it provides the company with location tracking and condition report without having to manually document and compute everything.

 Benefits of Automating Asset Tracking

           First, automating asset tracking allows companies to shift their attention from documenting changes to their assets and updating their reports to working on more important tasks and projects that need more attention and focus. Also, asset tracking allows companies to track a variety of conditions, events, and statistics that would usually be hard to manually track. With automated asset tracking it will be easier to access data like asset location, asset hours of use and more in real time using GPS digital systems and updated to the company’s database. Changes are made automatically and accurately; a quality automated asset tracking and management system can eliminate human error and work everything on to the company’s servers without needing human interference. Other than that, you can also do a complete audit trail and see what has changed recently and what exactly was added, removed, powered on/off. This removes and eliminates all mysterious activities to the assets. By automating the process there will be no problems like an employee forgetting to record the data or to schedule a maintenance appointment. Using automated systems accurate data will be collected and stored in the company’s database. This is more convenient for managers and employees to access these data from any place and at any time.

           Automated systems allow us to eliminate data silos. Every time you need to update data you need to recreate the file and share the new files and manually update them to your database. Trying to find the right files when needed while having scattered files all over will not be an easy process. You will manually need to update the same data in multiple places. Automated systems will allow you to put all the related data in one place and it will automatically connect all the dots you need to work with in one UI and platform.

           Unifying data silos in one place will not only benefit those who work on documenting and IT, but it will also benefit other employees that need access to this information. The ones who do the finance, inventory, audits and managers will all need to access these data; they will exactly know from where they can get it and access it at anytime and from any place.

           Finally, by automating your asset tracking, the system can monitor the maintenance of your assets and use accurate analytics to track the condition of your assets and schedule preventive maintenance appointments that allow you to protect your assets and decrease the risk of ruining them. Automated monitoring will allow you to schedule maintenances depending on the asset use keeping the asset at the best condition. You can catch issues with assets early on and fix them before they cause expensive repairs down the line.

           Most GPS tracking devices and management systems can be set up in order to automate asset tracking. The benefits of these trackers depend on your needs. Depending on the number of updates and accuracy you need data usage, updates, and battery life can be affected. Find a tracker that fits the company’s needs and that will take the company to the next level.