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Types of Inventory | Complete Guide for Small Business

Wednesday, March 9th, 2022

 

inventory kinds

inventory kinds

The Inventory is the most valuable asset of any company. It is the storehouse for all raw materials and finished goods required for business production. Types of inventory are an important concept in accounting, finance and management. In this article, you will find out types of inventory which will help you to get a clear idea about different kinds of inventories available in business world.

What Exactly Is Inventory?

A stock or store of things is described as inventory. A business maintains these commodities to meet demand and achieve its goals. Without an adequate inventory, the company may not know how much product (or services) it has on hand and won’t be prepared to meet orders—or even have the capability to do so.

Let’s say you run a business, and a customer walks in seeking new jeans. If you ran out of jeans yesterday and haven’t replaced them, that consumer may decide to purchase somewhere else, and it’s logical.

Furthermore, if you’re a manufacturer, you’ll need to keep various inventories on hand to keep things ‘going smoothly.’ You’ll also need to keep a stock of finished goods on hand to meet demand.

The Different Types of Inventory

There are various sorts of inventory that business owners and managers should be aware of regarding supply and demand. Understanding the different inventory forms can help you manage, plan, and budget more effectively, and you’ll be able to meet demand and succeed in the marketplace as a result.

1) Starting Materials

Raw resources are essential to every company’s survival, and they’re created from the same materials that your company uses to make its products.

If you run a lemonade stand, for example, the raw materials you’ll need are water, sugar, and lemon. You can’t make the beverage you market and sell without those raw elements. Customers who are satisfied (and no longer thirsty) are those who have lemonade on hand.

You can’t accurately anticipate what you’ll create over the following quarter or year if your organization doesn’t have a system in place to track its raw material supply.

2) In-Progress (WIP)

Work-in-progress (WIP) refers to all of the pieces that are currently being processed in a system, including:

  • Materials required
  • Components (components)
  • Assemblies
  • Subassemblies

Raw materials that have been released for first processing are frequently included in WIP. It also includes the full production process. Let’s say you’re the owner of an auto repair shop. Brake pads would be on your to-do list.

Expert tip: ERP software task feature would be ideal for keeping track of the status of your staff that is responsible for changing the brake pads on a car in your shop.

3) Delivered Goods

As you might expect, finished goods inventory includes any complete products that are now ready to be marketed and sold. The packaged and boxed ice cream cones, for example, would constitute finished goods inventory if your restaurant sells pre-packaged ice cream treats.

4) Materials for Packing

As the name implies, the packing material is the inventory you use to box and send your final items. Packing material is usually divided into three types:

  • Initial packaging
  • Back-up packing
  • Other packing materials

The box, bag, or other material that encloses your product while on retail display is considered primary packing material. Customers’ boxes or bottles from the grocery store shelf are your principal packing material if you sell laundry detergent.

The box, bag, or other material you employ for convenient storage and transportation of your product is secondary packing material. Using the laundry detergent example, the secondary packing material is the large box that carries four bottles of your goods for bulk storage and distribution to retail locations.

Miscellaneous packaging material includes everything else you use to store and transport your product, such as:

  • Protective bubble wrap
  • Peanuts made of foam
  • Pallets
  • Wrapping pallets
  • Labels

Packing materials may not appear to be a high cost at first sight. However, your company uses a significant volume of these supplies daily, and the costs will quickly mount if you don’t keep a close eye on this stock.

5) Back-up Stock

You can assign particular types of inventory to protect against supply-and-demand risks, low delivery reliability, and poor-quality components with good monitoring, tracking, and management. Safety stock is the term for this type of inventory cushion (or buffer inventory).

The amount of product you keep on hand as safety stock exceeds your organization’s requirements to meet regular demand.

You can avoid the following with safety stock:

  • Stock shortages (when an order cannot be filled from existing inventory)
  • Backorders
  • Making the consumer wait for the next manufacturing cycle
  • causing the client to look for the product elsewhere

When your company doesn’t have to deal with these problems, it can focus on providing better customer service—getting the product into customers’ hands when they need it without making them wait—and, as a result, more customer satisfaction.

A large amount of safety stock may be required depending on the type of business you run and the industry in which it operates. Other companies can get away with having very little or no safety stock. Everything is dependent on the market and how soon you can make (and deliver) a high-quality product to your clients.

A thorough examination of your process, employees, and fulfillment schedule will reveal whether or not safety stock is appropriate for your company.

6) Inventory Smoothing

Smoothing inventory (also known as anticipating inventory) occurs when a producer acquires and stockpiles products or supplies over current needs in preparation for a future event.

Businesses do this to “smooth” out the peaks and valleys of seasonal, shifting demand and maintain a consistent output. This is how it goes.

In the months proceeding up to the start of a new school year, a pen manufacturer will stock up on components, supplies, and finished stock (when demand is at its highest). The producer then gradually lowers the extra inventory without increasing manufacturing time during the back-to-school rush.

The manufacturer can save money in various ways by storing smoothing inventory, such as:

  1. Keeping employees occupied during sluggish months
  2. Reducing the number of temporary layoffs
  3. Stocking up on goods when they’re on sale
  4. Reducing labour costs such as hiring, on boarding, training, and other expenses
  5. Reducing the number of overtime hours required due to increased productivity.
  6. Keeping the plant from shutting down or idling

If your firm experiences a seasonal spike in demand, building this type of inventory ahead of time will help keep your process going smoothly and efficiently throughout the year.

7) Decoupling inventory

In a production context, every machine produces at a different rate. In the manufacturing chain, one or two pieces of equipment may run several times faster than other pieces in front of or behind them. Machines must occasionally be shut down for repairs or maintenance.

Manufacturers can maintain workflow despite these changes in activity and production time by keeping decoupled goods in stock.

Parts, materials, and finished goods waiting to be used by the next machine in the chain are referred to as decoupling inventory. Consider it a kind of shock absorber protecting the manufacturing process against production inconsistencies caused by differences in run time, machine breakdowns, or maintenance.

This type of inventory reduces the company’s reliance on the production line’s sequential nature, as Machine B doesn’t have to wait for Machine A to finish before they can begin. Even if Machine A is down for repairs, the operator of Machine B can pull parts from the decoupling stock.

The more decoupled inventory a company has in different stages of manufacturing and delivery, the less coordination it will need to keep things moving well.

8) Perform a cycle

Economic order quantity theory produces cycle inventory as a consequence (EOQ). EOQ seeks to strike a balance between inventory and machine setup costs.

Inventory costs rise when your company orders a large number of parts for a single large manufacturing run, while machine setup costs fall (because you only have to set up the machine once).

On the other hand, inventory costs drop when your company orders a limited number of parts for a series of modest manufacturing runs. Still, machine setup costs rise (because you have to alter the machine for each run).

The purpose of cycle inventory is to align these two charges and lower the total cost of the production run. This is accomplished through cycle inventory, which orders material in large quantities rather than as-needed.

9) MRO (Maintenance, Repair, and Overhaul)

MRO goods, or maintenance, repair, and operational supplies, are commodities used to keep the production process running smoothly. These items are frequently an important part of the manufacturing process but do not appear in the final product.

Gloves, packing materials, tools, and other MRO items are examples. MRO items inventory includes staples, pens and pencils, copier paper, and toner, as well as all of the small bits that keep the wheels turning.

10) Providers

Service inventory covers the monitoring and administration of all other types of inventory in the manufacturing process, which is critical to corporate success. In some ways, it’s the “humanized” version of MRO goods.

ERP software’s extensive scheduling system makes it simple to keep track of your service inventory by allowing you to easily plan your staff’s work schedules. Scheduling becomes much easier and more convenient as a result!

Your company will relax knowing that the manufacturing process is ongoing and that your personnel will always be available when needed. That’s what you call service inventory, right there!

11) Inventory in Transit

Businesses that need to convey commodities or resources from one location to another rely on transit inventories. Merchandise sent by truck or rail from a regional warehouse to your retail location can take days (or even weeks) to arrive.

When it comes to supply and demand, inventory in transit must be taken into account, as well as the deadlines for meeting those requests.

12) Average Inventory

Theoretical inventory aims to balance (equalize) the rates of entry, processing, and outflow into a single ideal operation. To that end, theoretical inventory specifies the average inventory required for specific manufacturing run under the assumption that no production items (or work-in-progress items) must wait in a buffer (e.g., decoupling inventory).

Theoretical inventory, to put it another way, is the bare minimum of inventory required for a product to pass through the manufacturing system without being held up.

Unless your company operates a single production system (e.g., one machine), theoretical inventory will always be a pipe dream since there will always be some inventory in the system (e.g., transportation, decoupling, MRO, etc.). You can still utilize this type of inventory to plan manufacturing runs and anticipate peak demand.

Unfortunately, simply comprehending the many sorts of inventory for business is frequently insufficient. Your company should have a good employee/inventory management system to make the most of the various inventory systems.

Inventory Control Is Critical

Inventory management is critical for the success of any business, whether it’s a one-person food cart, a catering firm, or a multi-national retail chain.

Even if your inventory is small, properly managing it can help you avoid the following problems:

  • Stock that has died
  • Excessive taxation
  • Costs of storage
  • Contamination (where applicable)
  • Issues with space

When you reduce the costs associated with inventory, you save money and increase your company’s cash flow. Essentially, you free up funds that would otherwise be lying on a shelf, capital that you may utilize for more important expenses.

Successful inventory management saves you time in the long term, which you could spend on other customer-focused operations. Inventory management, together with shift planning, labor tracking, communication, and distribution technologies, adds to the efficient functioning of your organization, regardless of the sorts of inventory you deal with.

To make this achievable, businesses need a single place to submit information on corporate activities, processes, and statuses. The ERP software news feed gives a readily accessible location for all employees. Companies may share updates and news with multiple groups of individuals, bringing teams together and keeping everyone on the same page.

Maintaining a good supply and demand cycle necessitates seamless communication and management systems. This, combined with a strong foundation and management team, is essential for effectively tracking your company’s many sorts of inventory.

Tracking your company’s inventory and supply and demand cycle will help you manage your organization more successfully in various industries, from retail and service to healthcare and non-profit. Soon enough, you’ll realize that running a business is as simple as producing lemonade, as we described earlier in the essay.

Ending Thought

Visit ERP software website today for more free resources to help you better manage your business, organize and plan your workforce, and track and analyze labour expenditures. If You want Inventory automation, drop us a line !!!

 

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Latest Technology to Track Inventory Effectively in 2022

Wednesday, March 9th, 2022

Inventory Tracking, inventory tracking devices, inventory tracking technologies

What is Inventory Tracking?

Inventory tracking is how a company continually monitors its entire inventory. Inventory may be defined in various ways, although it is most typically used to refer to raw materials, unfinished things, and ready-to-sell commodities.

You may access data such as your precise inventory levels, the location of each item or SKU, updated delivery statuses, and other inventory-related information with inventory tracking. Inventory monitoring occurs in every firm that works with inventory, such as manufacturing and production organizations, warehouses, retail shops, and so on.

Inventory Tracking: Why it Is Important . . . ?

Typically, inventory monitoring systems can keep track of the following data:

  • Stock levels have been updated.

This number indicates how much of each item you presently own. It’s critical to maintain this data up to date to know whether you have adequate stock for your business activities, whether they’re creating new things or completing client requests. Furthermore, your stock levels serve as a foundation for the other recorded data.

  • Inventory locations Identification

In the best-case scenario, we should not keep your inventory in a single area for an extended period. (If it does, it has either become slow-moving or dead stock.) When goods enter your warehouse, it is sorted and categorized, then stored, and finally retrieved and transferred to the next step of your supply chain. Because your inventory isn’t kept in a permanent area, it’s critical to maintain track of its whereabouts, so you know where to look if you need it.

  • Inventory Precision – KPI

This is a key performance indicator (KPI) that refers to the ratio of inventory that has been monitored to inventory that is physically present in your possession. Both numbers should ideally be the same. However, there may be variations due to theft, damage, miscalculations, and supplier shortages.

Inventory accuracy will reveal the magnitude of the differences. Inventory accuracy, like stock levels, is critical to the seamless operation of your company operations.

  • Inventory Tracking Helps in identifying Carrying expenses

This is the entire amount of money spent on storing, keeping, and owning goods. This covers the amount you spend on rent, labor, storage, and related expenditures, as well as security. Carrying costs may inform you how long your company can continue to hold this inventory before it starts to cost money.

Slow-moving inventory and dead stock are two major contributors to high carrying costs, so if you want to cut those expenses, you’ll need to find a strategy to get rid of or sell the things.

  • Inventory valuation

When a company produces its financial accounts, this procedure determines the worth of unsold inventory. Inventory valuation assigns a financial value to your residual stock, which must be added to your balance sheet. This might also aid in the calculation of your inventory turnover.

Inventory turnover refers to the frequency with which your inventory is sold. A greater figure indicates better sales, whereas a lower value indicates worse sales. Inventory turnover can inform you how well your company is performing and if your sales strategy needs to be tweaked. To determine yours, use our free inventory turnover calculator.

  • Rearrange levels

A reorder point or level is the quantity of stock left for a certain item to be renewed or refilled. Reorder points are critical for avoiding stockouts (where a seller runs out of stock).

Inventory Tracking Technologies Being Used in 2022

Many of the problems that companies experience, such as running out of stock, having excess stock (which means tied-up capital), or having outmoded products or spoiling, are the consequence of inadequate inventory management. You boost your bottom line when you employ inventory management software with inventory control technologies. Using technology to supplement inventory management allows your company to keep on top of things by simplifying the ordering and monitoring process throughout a product’s sales cycle.

  1. RFID (Radio Frequency Identification) Technology

RFID is an abbreviation for “radio-frequency identification,” and it refers to a technique that uses radio waves to collect digital data recorded in RFID tags or smart labels (described below). RFID is comparable to barcoding because data from a tag or label is taken by a device and stored in a database.

On the other hand, RFID provides several benefits over systems that employ barcode asset tracking software. The most significant difference is that RFID tag data may be read even when the tag is not in direct view, while we must align barcodes with an optical scanner.

RFID is one of a category of technologies known as Automatic Identification and Data Capture (AIDC). With little or no human interaction, AIDC techniques automatically recognize items, gather data about them, and input that data straight into computer systems. RFID systems do this by using radio signals.

  • LiFi (Light Fidelity) Technology

LiFi is a wireless communication system that uses light to convey data and location. LED bulbs are capable of transmitting visible light. In warehouses and factories, providing a wireless connection for many robots and electrical equipment is a difficult task.

LiFi has significant benefits over WiFi in certain circumstances and may be employed as a dependable wireless networking solution. Furthermore, visible light communication may enable precise 3D location for robots, drones, and other devices in warehouses and factories where indoor positioning and navigation are critical.

  • Barcodes system

We may find barcodes in various places, including identity cards, mail, and products purchased at a shop. For identifying reasons, a little picture of lines, bars, and spaces is mounted to practically anything you can think of.

Barcodes, in particular, employ a series of vertical bars and spaces to represent numbers and other symbols; a barcode normally consists of five parts:

  • A quiet zone
  • A start character
  • data characters (often containing an optional check character)
  • A stop character
  • Another quiet zone.

When we are using barcode scanners, bar-coding improves efficiency and production in various sectors. Laser beams are used to scan barcodes and convert the reflected light into data, which is subsequently sent to a computer for action or storage.

Most people are acquainted with barcodes and barcode readers in supermarkets and retail businesses. However, barcodes are handy in various uses, ranging from inventory to book checkout to monitoring bees for study. In retail environments, barcode readers are often coupled to computers, but they are also mobile and portable for other tasks, such as scanning barcodes in warehouses and monitoring inventory.

Robotics Technology

New robots technology has quickly become one of the most sought-after warehouse management solutions. Leading manufacturers collaborate with warehouse management system suppliers to develop bespoke software and smart robots that aid in the transportation, storage, and sorting of warehouse goods.

With rising order volumes, a plethora of items to explore, more tailored order packaging, and speedier delivery needs, robotics solutions will enable businesses to successfully adapt to volume growth and execute more jobs with less manpower and at a lower cost.

The growing desire for better performance and flexibility in warehouse robots is driving some creative product development and early adoption of mobile warehouse robotics. As a warehouse manager, you should choose a robotic technology that meets all of your demands in terms of workflow.

Do you know what is inventory management software?

Inventory management software, as the name implies, helps businesses manage their inventory and guarantee they always have what they need on hand. It keeps track of inventory levels, sales, material purchases, and deliveries, enabling firms to anticipate how much stock they’ll need and compare it to what they presently have. Inventory software shortens the time it takes workers and company owners to monitor inventory levels and locate the resources they want, resulting in increased productivity.

Although solutions from various industries range significantly, most inventory management systems assist in automating and controlling any or all of the following areas:

  1. Optimization of inventory balance (maintaining the best mix and volume of items)
  2. Inventory cost management
  3. Inventory tracking across sites using barcodes, serial numbers, or Internet of Things devices that scan radio frequency ID (RFID)
  4. Purchasing fresh inventory
  5. Management of warehouses
  6. Product sales (in-store or online) are linked to inventory levels.
  7. Keeping spoilage and obsolescence at bay
  8. Taking care of fixed assets (equipment, facilities, vehicles)
  9. Forecasting and planning of demand
  10. Financial reporting that is accurate

Conclusion

The technology you choose is according to the nature of your company and the requirements you believe must be met. The simple truth is that inventory management is critical to your company’s existence. If You need any kind of assistance and guidance regarding inventory management and want automation for your inventory. ERP Gold provides a complete inventory management system for all kinds of small and medium-sized businesses.

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Why You Should Use ERP Gold Inventory Management Solution for Your Business?

Monday, March 7th, 2022

 

Why inventory management by ERP is important?

 

Inventory management is critical to obtaining the desired results from your ERP. Simultaneously, your ERP inventory management system should provide a simple solution for organizing your products and stock.

Most businesses prioritize inventory management with ERP; fortunately, ERP inventory functions are extremely capable of managing stock by providing reports, processes, tracking, and even smart stocking locations to improve picking and packing.

What role does ERP Gold play in inventory management?

ERP Gold is the most recent inventory management solution, and it will make inventory management a breeze. Using this cloud-based software, you can easily manage your business operations and get the most out of it.

By providing accurate inventory data, it assists businesses in making better decisions. ERP inventory management systems allow businesses to manage their logistics, operations, finance, and inventory all from a single system, reducing errors and increasing efficiency. The inventory capabilities and features will be a top priority for most businesses comparing ERP Gold.

1. Ordering replacements in advance

Your ERP Gold inventory management system enables you to categorize parts, making it easier to order the correct quantity. Only one item is ordered when there is a specific demand in the exact quantity required to meet the demand. Another item is ordered when it is less expensive and easier to obtain. Your goal here is to make fewer transactions so that you can order enough to meet all of the demands seen over the next three months. Optimizing replenishments results in fewer transactions, which leads to improved inventory accuracy.

How it is done in ERP Gold: Go to the vendor point and click on it. Slide-down options will appear. Then you can click on the purchase order to obtain a raw or relevant product you want to demand from the vendor. After entering data, you can add its bill or receipt information of that order from the Enter Bill point, and here fill the doc. You can also add the disgrace bill information in this form as from the first point in the state is a bill of inventory, or we can edit the previously added statement in it.

2. Management of excess inventory
Surplus inventory can be identified and acted upon quickly. Whether the surplus is the result of a decrease in demand or you discover that the economy of a good buy wasn’t so economical, your ERP Gold inventory management system will immediately highlight the surplus. Is it appropriate for you to return the item?
How it is done in ERP Gold: Go to Advance Inventory option in ERP Gold and go to reports option and click on it the slide down menu will appear. Now from the point of inventory aging your old inventory or unsold or undermanned inventory will be shown with the vendor name and its contact number and its purchase date so you can contact the vendor to take back the inventory items due to low demand.

3: Turnover in inventory tracking

Inventory turnover can be tracked by segment as well as overall. ERP Gold inventory management systems enable you to categorize your inventory in a variety of ways and analyze whether your inventory assumptions are correct.
How it is done in ERP Gold: Click the Advance Inventory option and you will find categories option click on this. A simple form appears on your screen here you can see blue add categories button. So on clicking this you have to add the category name of your item. After that you have to click whether this item is active in market places and this product is not a dead product. You have to click this by true or false after that you have to write the date of that item and also add modifying date. Then save it.

4: Savings in the workplace

You save time and money by better organizing your inventory with your ERP Gold inventory management software. Improved organization can lead to higher levels of customer satisfaction. Moving the items with the most transactions to the front of the stock room and close to each other could help with organization.

How it is done in ERP Gold: Go to the advance inventory and choose the inventory option to adjust the inventory ratio, which is deducted automatically after sales. You can adapt the value and figures of the current inventory. You can find complete detail relevant to the inventory cycle that can be quickly being figured out from the reports section under advance inventory.

Other benefits would my company get from using ERP software?

There are other ERP systems available, but for the sake of this piece, we’ll concentrate on the advantages of adopting ERP Gold on the Salesforce platform. While many of the advantages are universal, Salesforce allows extra capabilities and connections to link corporate activities that would not otherwise be available.

Here are the top ten benefits of a ERP Gold system that can help you position your company for success.

1. Improved planning and resource management
Enterprise Resource Planning is a fitting term since it genuinely enables planning throughout your business, allowing you to estimate and forecast sales, expenses, and the resources you need, whether they be materials, equipment, or people.

ERP gives insights that allow you to plan production schedules and estimate resource requirements more efficiently. When events like equipment maintenance or order fulfillment can be predicted, you may minimize unplanned downtime or production delays. Better planning and resource management allow company executives to make more effective choices and address obstacles within the organization.

2. Improved inter-company cooperation
Personnel are often segregated within a company, but ERP consolidates information from all departments into a single source of truth, making it easy to disseminate correct data in real-time. Making all data accessible in one location and updating it in real time provides various operational advantages:

3. Enhanced Productivity
By automating important activities like as inventory monitoring or invoice production, you may increase overall productivity and concentrate on tasks that might otherwise go by the wayside.

And we can’t emphasize enough how much time can be saved by having a single source of truth for data across departments. Manual data entry operations, which used to take up important time, are now handled automatically – and with improved accuracy, saving time on revisions.

ERP can conduct complex calculations rapidly and automate time-consuming chores. Your staff can devote more attention to a project, do more revenue-generating work, and manage their time more effectively and productively.

Enabling teams to interact using correct information improves project success and, as a result, results in better customer service.

4. Lowering of overhead expenses
ERP systems, when implemented correctly, may provide considerable cost savings to your firm.Keep projects on schedule and on time by avoiding interruptions and delays caused by a lack of correct or accessible information.
Traditional data unification software requires extra workers, software licensing, training on numerous systems, and administrative resources; ERP may be quickly implemented and exploited by current staff.
Streamline operations by consolidating tools for everything from product creation to accounts payable in a single system.Give your staff the knowledge and data they need right at their fingertips to help them spend their time more productively.

Furthermore, an ERP system improves insight into cost fluctuations. Assume you normally pay $1 for a component, but it suddenly costs $3. ERP will make it simple for you to identify the cost difference, allowing you to choose a new vendor or alter your budget to account for the higher expense.

5. Improved customer connections
To improve the customer experience, all client information, from purchase history to personal data, is maintained in one location and fed directly into your ERP system.

You can automate customer services such as payment alerts for existing customers and lead nurturing strategies for prospects in the sales funnel by combining your ERP and CRM. You may also provide more information to sales and marketing teams to assist them seal a transaction.

6. Improved inventory tracking

Tracking and managing inventory is difficult, particularly for big organizations with a continual flow of items in and out and a high degree of client demand. ERP systems can manage individual inventory using serial numbers or RFID tags, and simple system inputs enable you to keep track of all of your assets, even if they are in various locations or in transit.

Supply chain management is also straightforward – ERP streamlines logistics and distribution and can be programmed to monitor inventory targets and decrease inefficiencies. Furthermore, inventory monitoring with an ERP system gives very precise inventory data for metrics such as client demand, shipping or storage costs, and over- or under-stocked commodities. To summarize, ERP enables you to better manage your inventory and regulate how expenditures are distributed.

7. Easier risk management and regulatory compliance

In the process of generating and spreading goods, every firm assumes some level of risk. ERP helps to reduce such risks by lowering the possibility of mistakes in accounting and financial operations and providing more visibility and control over operational details. With forecasting tools, you can determine whether you need to hire more people to manage a busy season or boost production to meet rising demand.

When it comes to revenue, every sector has revenue recognition laws and other compliance requirements that, if not followed, may result in fines or penalties. As a result, businesses must be exceedingly precise in order to be in compliance with the IRS, and an ERP system helps you to handle your finances properly, legally, and simply with built-in auditing tools and readily created reports.

8. Improved data security

Using ERP on Salesforce is, hands down, the most secure approach to keep your data. ERP solutions in general include built-in security measures to assure data safety, but when utilized on the Salesforce platform, you receive the advantage of Salesforce’s significant investments in security, providing the most up-to-date capabilities for event monitoring, authentication, encryption, and more.

9. Scalability and predictability

Without a doubt, an ERP system enables your company to be more predictive, resulting in improved business outcomes that allow you to grow. You may combine real-time data with increased flexibility and visibility, giving you a significant edge in terms of efficient product creation.

Not to add that market shifts will not leave you stranded and searching for a strategy. You’ll have previously budgeted for volatility, allowing you to keep your company operating smoothly.

10. Improved customer service

One of the benefits of Sales force is improved customer service because you are able to track customer orders and invoices in one place rather than in different programs or spreadsheets. This allows you to provide better service by being able to quickly identify potential issues or problems with customers’ orders so that they can be addressed before they become a problem for your business.

 

End

These are essential characteristics of any good centralized inventory module. You must know that an ERP software is very much important for your specific business and ensure that the ERP Gold you choose has the ones you require.Thanks

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How to use Barcode, RFID Tags And QR Codes for chemical inventory tracking

Wednesday, March 2nd, 2022

 

Although barcodes, QR codes, and RFID tags seem to be interchangeable, they are not. While all three technologies may be used to identify and monitor chemical containers, they are each intended to function in a unique manner.

You’ll need to know the many kinds of tracking tags, what information they carry, and the strengths and limits of each one before you can select which labeling system is best for your chemical inventory.

How to use Barcode, RFID Tags And QR Codes for chemical inventory tracking

 

What are the benefits of chemical labeling?

Hundreds of bottles, vials, and tubs of chemicals may be found in a single research facility. You must keep note of the chemical’s name, quantity present, related dangers, location, and who it belongs to for each container.

In addition, when a new container is acquired, it must be registered in your chemical inventory and monitored when it is discarded. That’s a lot of details! And, as we all know, the devil is in the details: the one item that gets overlooked always turns out to be the most crucial.

When your chemical containers enter your plant, apply stickers or tags (in the form of barcodes, QR codes, or RFID tags) on them. This is the most complete method. So, how do you choose which one to use? And why is that? We’ve broken it all down for you here.

Barcodes are a sequence of black lines (or “bars”) that represent a string of numbers (a “code”), as the name implies. Universal Product Codes (UPCs) are another name for barcodes (UPC).

The scanner converts the sequence of bars into a string of numbers when you scan a barcode. These numbers refer to a particular record in a database that includes information about the record in question.

Almost everything, even toxic containers, may be labeled using barcodes. They’re simple to design and print. Because most barcode scanners are nothing more than a point-and-click gadget, they don’t need any training. There are even programs that enable you to use your smartphone or tablet as a barcode scanner these days.

Barcodes, on the other hand, have several drawbacks. The most significant disadvantage is that each container must be scanned individually, which might take a long time if you need to inventory a large number of containers quickly (this challenge is the same for QR codes).

When it comes to chemical inventory, a frequent fallacy is that you may utilize the barcode that is already on the container when you get it. You’ll need to print a fresh label for your own inventory since the manufacturer’s label matches to their inventory. If you buy four bottles of sodium azide from the same manufacturer, the barcodes will all be the same! Certainly not what you want in terms of container tracking. Fortunately, printing and applying fresh labels is a simple and quick process (though there is more complexity to selecting the right label than you might expect).

The advantages of chemical inventory barcodes

Pros:

  • Barcodes are inexpensive to develop and print
  • simple to use
  • tried and true
  • If you decide to change chemical inventory software, barcodes can be readily transferred to the new system.

Let’s go through the process of moving from an old chemical inventory system to a new one using barcodes vs. QR codes to demonstrate this crucial difference:

Understanding chemical inventory barcode migration:

  1. When a barcode is scanned on your previous system, the scanner reads a series of characters, such as 43784780.
  2. Your system compares this string (43784780) to your database, which retrieves or redirects you to the appropriate page.

Bottle #46 of Sodium Azide, for example.

  1. You must move your chemical inventory information (including the data for Sodium Azide bottle #46) to your new system.
  2. Scanning the old barcode yields the same string (43784780), which your new database may use to cross-reference and provide you with information about Sodium Azide bottle #46.
  3. Success! You’re done, and your labels don’t need to be changed.

What are QR Codes?

A rapid response (QR) code encodes information as a sequence of pixels in a square-shaped grid and can be read simply by a digital device. QR codes are often used in marketing and advertising efforts to monitor information about items in a supply chain.

Understanding the migration of the Chemical Inventory QR code:

  1. When a QR code is scanned with your previous system, the scanner reads a string of characters.
  2. You are instantly forwarded to a URL where you may examine container information, or information is taken from that URL.
  3. You must move your chemical inventory information (including the data for Sodium Azide bottle #46) to your new system.

The benefits of chemical inventory QR codes

  • Simple to use
  • No special scanner necessary – may use a cell phone or tablet
  • Capable of storing enormous quantities of data

What is RFID?

Despite the fact that barcodes, QR codes, and RFID tags all seem to be interchangeable, they are not. While all three technologies are used to identify and monitor chemical containers, each is designed to work in a different way.

You must first understand the various types of tracking tags, the information they contain, and the benefits and drawbacks of each before deciding which labeling system is ideal for your chemical inventory.

Benefits of chemical inventory RFID tags

Pros:

  • Tags don’t need to be scanned individually
  • Fastest way to read a large number of containers
  • All data is transmitted instantaneously
  • Can set up static monitoring stations

Final thoughts

Now you know the differences between barcodes, QR codes, and RFID tags, you’ll be in a better position to choose the right labeling system for your needs. ERP Gold has got a simple process to serialize your products. You don’t need to make any investment in equipment or new software. All you will require is barcodes, QR codes, and RFID tags that can help you track the movement of your products across all the stages including manufacturing, warehousing, distribution, and retailing. If you need any kind of guide regarding inventory management systems for chemical, ERP Gold is considered to be the leader in serialization and other robust inventory tracking system.

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How to optimize inventory management? Tools & Tricks

Monday, February 28th, 2022

What is Inventory?

To optimize your inventory, you need to understand what is included in the inventory.  Inventory is comprised of raw materials, work-in-process, finished goods, and MRO (maintenance, repair, and operational) items and everything else you offer to clients.  Inventory control is the process of ensuring the appropriate amounts of stock are maintained by a business, to be able to meet customer demand without delay while keeping the costs associated with holding stock to a minimum.

Difference between Inventory Optimization and Inventory Management

  • Inventory Optimization

Inventory optimization is a process that focuses on identifying inventory levels to fulfill client demands keeping in mind the lowest cost by providing expected service with minimum logistic cost. As a result, inventory optimization aims to predict demand as accurately as possible and maximize the company’s financial output from inventory.

  • Inventory Management

Inventory Management refers to a systematic process of ordering, receiving, and tracking inventory within the walls of the organization’s facility. The purpose of inventory management is to maintain the required inventory to ensure the productivity and efficiency targets are attainable.

How is inventory optimized? 

Supply chain inventory optimization is defined as a method of balancing a large number of item numbers or SKUs with predetermined service-level targets while accounting for all demand and supply fluctuation. Simply put, it is maintaining the right amount of inventory, so you are meeting customer demand while minimizing cost and maintaining efficiencies.

Inventory optimization is considered the next level of inventory management by warehouse and supply chain managers. As a result, business leaders are looking to companies like ERP Gold to get real-time inventory information to make the necessary decisions for both supply and demand changes.

With supply chain inventory optimization, manufacturers can resolve warehouse management and stocking issues. According to studies, incorrect packing, storing, or securing in freight containers causes roughly 65 percent of inventory damage. To a large extent, inventory optimization can aid in the resolution of these issues.

In 2023, the cost of out-of-stock items is estimated to be $1.77 Trillion, while over-stocking cost more than $562 billion. With accurate Inventory Optimization, manufacturers may leverage predictive analytics and data-driven insights to streamline stocking difficulties.

Below are the factors that must be taken into consideration for inventory optimization.

  1. Demand forecasting accuracy

Forecasting is critical for supply chain inventory optimization. Depending on the sort of products or services involved, the product life cycle, and the industry being served, demand and supply chain forecasting can be done in a variety of approaches. Using demand statistics from the preceding year or period, as well as exact request estimations from sales teams, could be one option. Manufacturers and wholesalers must have a thorough understanding of the unique product lifecycle to properly anticipate demand and establish where those SKUs are in the lifecycle. Both manufacturers and wholesalers must keep track of seasonality patterns and new product launches, both of which can affect demand projection estimates.

     2. An Inventory Management Strategy

In order to create a strategy, it is critical to understand which products must be delivered, in what amounts, and at what intervals. For example, ABC analysis is an excellent technique for stocking SKU amounts, because it divides SKUs based on their annual consumption value. It also helps you understand safety stock calculations so you can manage unanticipated demand changes, supplier variances, or other disruptions. With any strategy, you must assess the amount of space you have and what you need to have in order to deliver your product in the appropriate quantities at the appropriate times, both within your facility and your customer’s door.

     3. Supplier Evaluation

The final factor to consider in your inventory optimization plan is your suppliers.  It is crucial to understand the various lead times from your suppliers so you can stay on top of your on-hand quantities and when they need to be reordered, as well as create the order. It is also just as critical to evaluate supplier capabilities and capacity.  Are they able to run ad hoc orders if there is a spike in demand?  Do you need to have a second / backup supplier in order to meet your orders?  Additionally, manufacturers and wholesalers must keep track of all goods in transit, not just those in stock at the warehouse. ERP systems, like ERP Gold’s inventory management software can help with your safety stock and reorder points and alert you when those orders need to be placed.

Obstacles in Inventory Optimization Process

As with any optimization strategy, there are also obstacles to overcome.  Sales forecasting is tough to achieve efficiently with altering demand cycles, thus this is a top concern. The accuracy of the sales prediction and the accuracy of the inventory levels are inextricably linked.

  • A paper inventory management system

Managing your inventory on paper has become increasingly difficult.  The ability to quickly react to changes in demand necessitates the need for a real-time inventory system such as ERP Gold

  • Multi-channel sales challenge

The way customers buy inventory has drastically changed.  You may or may not have a brick-and-mortar store, and you may or may not sell directly to your customers. Given all the scenarios in online and offline shopping, each channel operates differently and has different KPI targets, so creating ideal inventory levels to meet all of this could be a challenge.

  • Dead stock

Dead stock is items that can’t be sold because they’re irrelevant, out of style, or no longer, and carrying dead stock is expensive.  Your inventory optimization efforts need to include strategies for getting rid of the dead stock. If you are keeping dead stock for long periods of time (usually more than a year) it will have an impact on future purchases of similar items, making inventory management more difficult.

  • Inadequate monitoring of performance

Because the environment is consistently changing, a company needs real-time accurate inventory reporting.  The reporting needs to measures both tangibles and intangibles inventory optimization initiatives. Without reporting, you are treating symptoms not the actual problem.

Best Practices for Inventory Optimization in Small Business

1: Centralize your inventory control

When it comes to inventory optimization, having all your inventory on one platform and in real-time is a significant advantage.  This allows you to respond to issues quicker and more effectively.

2: Demand Forecasting

As we learned earlier, demand forecasting is critical to your business.  Having the correct mix of products, available at the right time is what makes your business and keeps your customers coming back.

3: Establishing Realistic Goals and Targets

In order to determine if your inventory optimization is working, you have to have realistic goals and targets for all the components of your inventory.  You need safety stock goals, re-order points, and dead stock elimination plans, etc. You won’t know if your optimization is effective if you don’t have something to check it against.

4: Continuous Audits

The final piece is continuous audits.  You need to determine the appropriate timeframe for the audits and the order in which they need to be done.  Just like cycle counting your inventory to make sure it is accurate, you need to make certain all the other points of your optimization strategy are working.  For example, the reorder purchase orders are going out and you are receiving the inventory in the lead time expected.  Or you forecasted a 10% increase in demand over the next 3 months, is the increase more or less than projected?

Why Do Small Businesses Need to be Using Inventory Optimization Software

The basic goal of inventory optimization is to ensure that the right inventory is available in the right quantity, at the right time, and at the right price. With effective Inventory Control Optimization Software, manufacturers and wholesalers can achieve that goal and much more:

  •  Gain real-time visibility into inventory levels and order tracking status to increase customer satisfaction and boost performance throughout the sales process.
  •  Recognize that optimizing warehouse inventory levels can reduce operational and inventory costs. This can help a business enhance its performance by allowing it to become more lean and profitable.
  •  Improve your work’s quality by getting it right the first time. By preventing needless reorders caused by erroneous information about what stock is currently on hand, increases overall operational excellence and reduces inventory expenditure.
  • Boost productivity by analyzing data and reports to better understand product variability and make better strategic and operational decisions.

ERP Gold is a complete and integrated suite for managing your business. Whether you are a manufacturer, wholesaler, or e-commerce retailer, we help you manage all aspects of your business from sales, and purchase to production, delivery, and even returns of products in real-time with greater accuracy and efficiency. ERP Gold is here to help you with all your inventory management and control issues!  Click HERE to read more about how we can help, call us at 888.334.4472 for a free consultation.  If you want us to call you, fill out our contact form HERE.  Or click HERE to schedule a free consultation or demonstration of how we can help you.

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