Panatrack has partnered with prominent GP organizations and thought leaders to present blog posts that cover a range of topics regarding Dynamics GP, ERPs, inventory management & asset management, and everything in between. The topics and content are published here with the kind permission of the credited authors. Please enjoy this submission courtesy of LBMC Technology Solutions
Inventory Management Begins with Organization
The number one factor around good inventory management is organization. Your warehouse and stock management flow needs to be highly organized to best keep track of what you have and where it’s located. The importance of this is magnified when your business operates multiple warehouse locations.
Organization with Bar codes
Bar coding your inventory almost always guarantees better management of your stock keeping levels, including reducing put away time, order fulfillment retrieval times and most importantly, the accuracy of each transaction. Years ago, a large distribution client budgeted to deploy a robust bar coding solution to reduce incorrect pack outs and a nearly 30 percent customer order return rate due to inaccurate picks and packs. The goal was to reduce the error rate from the current 30 percent down to 15 percent. Cutting customer returns in half due to shipping incorrect products would save enough to pay for the solution.
After investing the time and money into the software, hardware, wi-fi devices, setup and training, the system was up and running. After about 6 months of using the new bar code system, I asked the owner how things were going now that the company had half a year under the new process. He replied that it was the best money he had ever spent! The solution paid for itself in 90 days because the error rate went from 30 percent to zero. Much better than the expected outcome of still willing to allow a 15 percent pick and pack out error level.
Of course, bar coding makes cycle counting your inventory much easier by using scanners to manage the process instead of printed reports and clipboards. Imagine not having to shut things down for a day or two each year to struggle through your annual physical count. No one ever looked forward to that weekend of work anyway. Warehouse team members had to accurately count everything, and the office staff had to key adjustments into the ERP system and the owners held their breath to see if the profit for the year would evaporate or maybe worse yet, increase dramatically late in the year as a result of adjusting to the physical count.
Do yourself and your inventory a favor…consider bar coding and gain the confidence that your inventory is more accurate than it’s ever been, and errors are virtually eliminated when putting stock away, picking and packing for shipment to customers.
Brian L. Wilton, CPA.CITP
Vice President – LBMC Technology Solutions, LLC