Managing Manufacturing Inventory: Transparency is Key
February 27, 2014
Let’s face it—inventory doesn’t do you any good unless you have a need for it. But, when it comes to a strategy to manage manufacturing inventory, how much is too much for your business?
Countless misconceptions exist around maintaining and managing inventory levels. For some, the search for best practices in managing manufacturing inventory seems like a wild goose chase.
Plan the Work, Work the Plan
Managing manufacturing inventory requires skillful planning of raw materials, work in process (WIP) and scheduling of finished goods. Lean principles can help define a process to manage manufacturing inventory and shift the organization’s culture away from a practice of hording raw materials.
For businesses looking to manage manufacturing inventory, there are numerous assessments that can help you get a handle on best-practice inventory management.
Best Practices in Inventory Management
The ultimate goal when working to manage manufacturing inventory is to have the right inventories on hand at the right time. Unfortunately, this is often easier said than done. World-class inventory standards might dictate less than a month’s supply of raw materials or work in process. But the feasibility of this very often depends on the business. Managing financing and scheduling of raw materials, work orders and shipment of finished goods can feel like a full-time effort plagued with fighting fires.
For many CONNSTEP clients delivering services or components to OEMs, the extent of their collaboration with customers is the guidance that “I want five of these by this date.” Although the manufacturer is happy for the work, the questions can’t end there if they hope to better manage manufacturing inventory. Who owns the inventory management? Is it the OEM or the supplier?
Trying to reach a happy medium when it comes to balancing inventory management across supply chains means developing a level of transparency many business are uneasy with.
In these instances, the best tactics to manage manufacturing inventory could range from a “gut feel,” (if you think you have too much, you probably do) to a basic analysis to determine what you think you need on-hand based on experience and your customer relationships.
Ultimately, you don’t manage manufacturing inventory on a one-time basis. It’s an ongoing effort. As you learn more, you will be able to apply your knowledge into action and get to market with an edge.
An Inventory Management “Quick Hit”
Packaging material can be the low-hanging fruit to help you manage manufacturing inventory. Too many businesses stockpile packaging, even though it typically comes from a local vendor and is available in short order. A great first step might be looking into better ways to buy this material (or different ways to package the product itself).
Getting started with some effective strategies to help you manage manufacturing inventory is as simple as contacting CONNSTEP today. Our Lean process experts are standing by to help you find the right inventory balance for your business.
Let’s face it—inventory doesn’t do you any good unless you have a need for it. But, when it comes to a strategy to manage manufacturing inventory, how much is too much for your business? Lean principles can help define a process to manage manufacturing inventory and shift the organization’s culture away from a practice of hording raw materials.
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