For most companies, Inventory represents 50% or more of their costs when manufacturing products. This means that it is paramount to manage raw materials, work-in-process, and Finished Goods.
It is important to avoid the ‘Stockouts’ for customer shipments or if you need to build something. Conversely, excess inventory consumes much-needed working capital. In addition, obsolescence, which is what excess inventory becomes once new products are introduced, ruins a company’s margins.
So, what is the answer? The first step is ensuring that you have a way to monitor the inventory levels of your raw materials. For smaller businesses, with few raw materials and transactions, this is easily accomplished using a spreadsheet and ensuring that transactions are recorded in a timely manner.
Here is a view showing a small portion of a perpetual inventory record using a spreadsheet.
Manufacturing and Supply Chain Services
We are Manufacturing and Supply Chain Services, MSCS, specializing in enterprise-wide production and operations management programs. Our company’s proprietary processes and services promote organization, control and cost reductions boosting your company’s bottom line. How can we help you?
Learn more about MSCS’s production operations and supply chain programs. Please follow this link.