Inventory management is one of the core functions in manufacturing and its supply chain and therefore a key functionality of any advanced MES solution, such as FactoryWorxTM MES. It is responsible for tracing and managing inventory and stock quantities in and out of your warehouse. The key focus of inventory management systems is accuracy and control of the inventory stock, location at any given time and cost optimisation.
FactoryWorxTM Inventory Management automation and real-time inventory visibility provides superior efficiency and accountability of inventory management in the manufacturing process, from components arriving at the loading dock, to product traceability through the entire Supply Chain to the Customer.
FactoryWorxTM Inventory Management differentiates between Inventory Management and Stock Management. As these two terms sometimes cause confusion, let’s define them now. Stock Management is a subset of the overall inventory. Traditionally, stock items are considered to be the goods you sell to customers. Inventory, on the other hand, includes the products you sell, as well as the materials and equipment needed to make and deliver them to customers. While both terms are used interchangeably, inventory is a broader term.
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The comprehensive FactoryWorxTM solution incorporates two essential facets of inventory management: FactoryWorxTM Inventory Management and FactoryWorxTM Warehouse Management System (WMS). With automation there is total visibility of everything in the factory: stock and products. SAP is not interested in where product is located.
FactoryWorxTM Inventory Management provides a complete visibility and optimisation of all stock and inventory movement associated with production and logistics.
While the main purpose of production and warehousing inventory management is the movement of products through production process to customer, it is more complex than that. FactoryWorxTM Inventory Management system monitors and manages four main types of inventory:
1. Raw Materials/Components– the primary type of inventory which goes into finished products and has a direct impact on cost of goods.
2. MRO supplies – inventory that enables engineering and maintenance to efficiently perform their tasks to keep production running
3. Work-In-Progress (WIP)– raw materials’ inventory that goes to finished goods, ensuring that inventory on the BOM is always available on schedule.
4. Finished Goods – refers to stock of products manufactured to customer requirements that are ready for delivery or distribution.
MRO stands for maintenance, repair and operations. In inventory management it refers to the products and tools purchased that keep an organisation running. In other words, these supplies do not become part of the end product but are used in the production process at a manufacturing plant and have a direct impact on cost of production.
Digital ability to monitor costly engineering inventory ensures ready availability of parts and can translate into massive savings and efficiencies in production. However, there is a trade-off to be calculated between availability vs cost of stock. Lean Inventory management techniques, also included in FactoryWorxTM Inventory Management, minimise stock vs availability (lead times) and cost of downtime of equipment. Effective MRO management supports core manufacturing activity.
Today, transportation and logistics are not just the major cost drivers in product manufacturing but also the major risk to potential brand reputation. Investing in the advanced FactoryWorxTM Inventory Management system with a proven, built-in capability to significantly reduce these two factors is a smart and easy choice.
The FactoryWorxTM Inventory Management System supports manufacturing and warehousing operations beyond just handing you a great, intuitive software.
In order to leverage this powerful tool, FactoryWorx has structured software functionality around the key functions that bring the physical and digital environments together.
FactoryWorxTM Inventory Tracking System is one of the key feature of FactoryWorxTM an automatic inventory controller, consisting of digital processes and policies designed to monitor the movement of inventory. So, whenever an inventory transaction occurs, the inventory system gets an automatic notification of the transaction. This eliminates the risks of the human error and effectively replaces the old manual card system.
LEVERAGE THE POWER OF TIMELY INSIGHTS
The powerful reporting features of FactoryWorxTM Inventory Management System provide operators and management with instant, and easily accessible range of reports to enable rapid response to operational requirements and to make accurate decisions regarding inventory purchasing.
Few people in manufacturing would need to ask why Inventory management is important in their operation and the Supply Chain. Yet, a surprising number of manufacturers and warehouses are not leveraging the fantastic potential of an automated, digitised Inventory Management system to save cost, time, stress and, ultimately to secure customer satisfaction.
If your operations even occasionally experience production downtime due to shortage of stock or machine spare parts, getting wrong parts, incorrect stock counts, mis-shipments, out of stocks, overstocks, mis-picks, and so on, clearly you need a solution. A good warehouse management is key, one that easily integrates with other systems and will take you well into the future.
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Just how critical is accuracy, relevance and correct insights into Inventory Management is reflected in the large number of techniques companies try to apply to get the right answers. Unlike many Inventory Management systems focus on one or a few of these techniques, FactoryWorxTM Inventory Management can accommodate any of your requirements.
You are no doubt using one or more of these techniques, but potentially as a manual or inadequate computerised system. While FactoryWorx can support you in whatever your best practice requirements are, there are just a few facts you may find useful.
The Average Quantity System (AQS) confirms the measurement or quantity of packaged goods being sold by measure (weight, volume, length, area, or number). It is an internationally agreed method of determining the size or quantity of pre-packed articles with a ‘constant nominal content’. The Average Quantity System (AQS) provides confirmation of the measurement or quantity of goods in the package, being sold by measure (weight, volume, length, area, or number).
Under Australia’s trade measurement legislation, manufacturers, packers, and importers must use either: the Average System or AQS (The average net content).
Economic order quantity (EOQ) is the ideal order quantity a company should purchase to minimize inventory the cost of carrying inventory and the processing of purchase orders or production set-ups. The formula also takes the number of units in the delivery of and storing of inventory unit costs. This helps free up tied cash in inventory for most companies.
The LIFO and FIFO methods not only help determine the cost of inventory. FIFO, or First in, First out, also helps control and ensure the older inventory is used and sold first. FIFO is a great way to keep inventory fresh.
The FIFO method is the most popular inventory method because it reflects the actual movement of inventory for most businesses. It is one of the most common methods of inventory valuation used by businesses.
If you (or your Predictive Analytics) expect inflation, the FIFO method yields a higher value of the ending inventory, lower cost of goods sold, and a higher gross profit.
Just-in-time (JIT) inventory management technique that coordinates raw material orders from suppliers with production schedules is increasingly connected to Lean Manufacturing. While it is a great way to reduce inventory costs, it also exposes manufacturers to risks of unexpected costs of failures in the supply chain. Predictive Analytics, which leverage IoT integrations and big data that provides insights which are outside your own operation, is a viable solution to avoid these risks.
This is an incredibly valuable technique that enables product traceability. As a quality control technique it enables companies to group and monitor stock with similar traits. You can track the expiration of inventory or trace defective items back to their original batch through the Supply Chain. Obviously, your Inventory Management needs to be able to integrate with IoT technologies and diverse systems within your Value Chain. We can help.
This technique, in line with principles of Lean Manufacturing, aims to improve efficiency by eliminating waste and any non-value-adding activities from daily business. FactoryWorxTM Inventory Management system, through its Organisation functionality, enables to design inventory physically and digitally to achieve Lean KPIs.
It is important to keep in mind that while Lean Six Sigma uses and enhances the tools of Six Sigma, it has a strong focus on instead embedding standardization in the flow of business. This is significant as it underpins the future of Manufacturing, i.e. Industry 4.0.
FactoryWorxTM software integrates with any system and information that is appropriate for you and your industry.
We also use the average landed costs methodology.
Yes. FactoryWorxTM software leverages IIoT devices and scanning technologies, such as barcoading, that enable you full visibility of your stock and inventory anywhere on the production or warehouse floor.
Easy. FactoryWorxTM reporting will enable you to use Stock-on-Hand enquiry report. Or you can use an Item enquiry report to gain instant visibility of available stock.
Yes. FactoryWorxTM reporting feature lets you see the full transaction history of serial and batch number, when they were created, when were the products sold/dispatched to customers, or deleted.
The best aspect of this exceptional manufacturing solution is its flexibility. While some companies are ready to go full throttle into full Industry 4.0 transformation, and beyond; adopting FactoryWorxTM Inventory Management one functionality at a time, is a very viable option. Each of these functionalities is an independent mini-MES Module that enables implementing automation and new efficiencies where they are most needed.
If you choose to get a DEMO to see FactoryWorxTM Inventory Management in action, our expert will show you the best way to address your most challenging or annoying manufacturing issues.
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WHAT IS YOUR KEY MANUFACTURING CHALLENGE?
Try Before You Buy. Adopting new, advanced MES, Manufacturing Execution System, whether as a single function or entire Industry 4.0 transformation, is a major business commitment. It’s not just cost, but also potential disruptions, increased workloads and a steep learning curve. Not with FactoryWorx!
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Well, what now? Sitting on the fence is not going to solve any problems. They are just going to get bigger.
The fact is that the choice of the best MES solution for your manufacturing operation is easier than you think. FactoryWorx modular, scalable MES platform can rapidly transform manufacturing companies into Industry 4.0 leaders. It is recognised for its comprehensiveness and exceptional value by some of the leading brands as well as small manufacturing operations.