Make an impact
It’s critical to choose the right inventory management partner
By Susan O'Weger
Since 2008, the business community has undergone significant change. Survival for many companies today means doing more with less. Productivity is now the focus in an environment where margins are ever so thin. The key to success in this challenging climate is efficiency. Inventory management software is one area where industrial distributors are gaining an edge on the competition by helping their customers become more efficient. U.S. manufacturers are under significant pressure to reduce costs and increase production. With increased production and cost reductions come inventory management concerns. Distributors are vitality important in helping their customers monitor inventory levels.
Inventory management provides an opportunity for industrial distributors to impact more with less. With the right inventory management system, distributors have the chance to do what they do best: help their customers become more proficient and effective at their job.
Larry Harper, president of CribMaster Inventory Management Solutions, agrees. “When you look at a distributor, inventory management is their business mode. That is something they do very well.
To have distributors put people, metrics, processes and systems in
place to manage inventory is great, especially today when resources
are so tight for the manufacturers,” he says.
FOCUS ON YOUR STRENGTHS
Manufacturers don’t have the time or the resources to accurately and effectively manage their inventory and must rely on their distributors to do so. Their job is to have the right product at the right time so manufacturers can focus on building the world’s fastest airplanes, most fuel efficient cars, and quality industrial equipment. Industrial distributors have the opportunity to improve efficiency and productivity at their customers’ site on every shift of every single day. Implementing a successful inventory management system is the vehicle to get them there.
So how do the industrial distributors get started with inventory management?
The first step is choosing a stable inventory management partner with proven solutions. A partner must have the experience, expertise and a strong back-end system. The system must accurately track real-time actions within your business, not only at the point of use, but also manage the relationships between the supplier and the end-user.
A proven inventory management system will encourage your customers to lock in and expand business with you.
After selecting your partner, the second step is building an inventory management program tailored to your customers’ objectives. Committing to one inventory solutions partner is important in order to build a program suited to the needs of your business. “You should have a solid program, a solid partner that will walk through fire with the distributor and customer in all manufacturing processes, as well as on the systems side,” says Harper.
Many options in inventory control programs are defined by specific customer objectives. The right solution provider will work with your business to tailor the solution to your needs. Manufacturers are focused on streamlining their operations and making productivity improvements without additional labor costs. Implementing a system that provides the critical data to manage the processes is essential in cost savings across their entire enterprise. There is no “one size fits all” solution for inventory management, so determining your objectives up front is important for success. Select the products that you want to manage, the usage level, and the level of service required to meet your customers’ goals.
A VENDING MACHINE IS NOT A COMPLETE SOLUTION
The third, and possibly most important step, is ensuring that your inventory management partner provides a solid innovative back-end software system for inventory control. A vending or point-of-use machine is only a box without a back-end software system. A vending machine is not the same as a complete inventory solution. A robust software platform will help with identifying cost reduction activities at all levels of the manufacturing process, including item usage, employee, machine, job or cell. The CribMaster system has a proven record of reducing inventory spend levels by 20% to 30% in the first year. A simple and consistent user interface simplifies and solidifies the process of checking items in and out. Authentication and determination of your user, either at the vending
machine or at the crib, should be first in the inventory process. A good back-end software system will then record the transaction in real time.
Additionally, an automated replenishment system does not just increase productivity, but also greatly reduces stock-outs. Securing product, reducing walk-time to cribs, reducing wait time and on-hand inventory are all features that a great back-end system will provide.
Robust reporting capabilities are another key advantage in a software system. Reporting will track usage with transaction detail and summary at item, employee, and department levels. CribMaster offers more than 190 standard reports that track every aspect of indirect material management, inventory control, replenishment needs and personnel accountability. Once an item is checked out, the user then becomes accountable for the tool and the time spent using it is monitored through the tracking capabilities of the inventory control software. In the past, employees in many different tool-dependent businesses had a tendency to hoard tools because they were not confident they could access that tool again once it was returned. Tool tracking becomes an automated process with an inventory control software system.
Since each tool is managed and logged, if there are missing items or items in the hands of an employee for an extended period of time, a good tool tracking software will report what is missing, how long it has been missing and who is accountable.
Doing more with less is fast becoming the new norm. Cost saving initiatives will always be part of the success of growing your business. So whether your customers require low security or high security, there is a solution available to fit both you and your customers’ needs. A proven inventory solutions system will lead to continued growth for you and your customers. It’s the key to making a lasting impact on your customers to lock in more business to ensure your success.
Susan O’Weger is marketing manager for CribMaster. Visit www.cribmaster.com to learn more.
This article originally appeared in the Sept./Oct. 2012 issue of Industrial Supply magazine. Copyright 2012, Direct Business Media.
INDUSTRIAL SUPPLY MAGAZINE
The November/December issue of Industrial Supply magazine features an in-depth cover story about Kimball Midwest. Plus, we're featuring articles by contributing writers Dirk Beveridge, Frank Hurtte, and Mike Marks, as well as interviews with numerous product and distribution industry experts.
