As a part of FM Business Daily’s ongoing subject matter expert content, ShelfAware CEO and Founder Andrew Johnson provides supply chain management best business practices every month for facility managers and other industrial professionals.
There are many reasons that facility managers perform regular inventory audits. The most obvious is to ensure an accurate count of all physical components on the shelf. It’s also a good idea for insurance purposes. With automation, a quick scan of an entire room of inventory can create detailed reports to determine the dollar amount of inventory on hand. This ensures better insurance reports and rates.
In addition, inventory audits are helpful for calculating profits, creating more accurate budgets, and identifying inefficiencies in manufacturing operations. Often, companies have poor tracking methods and might not actually know their current supply levels. They may be selling products that are already out of stock or planning production runs without enough materials.
The solution to these complicated inventory issues is to carefully track materials and products so that you always have necessary products on hand without being oversupplied. The first step in managing your facilities is to perform an accurate inventory audit.
For most facilities, it is a financial requirement and an organizational burden. Through the years we’ve seen some shift to perpetual inventory or cycle counting, essentially breaking up the audit in chunks throughout the year. However, most still just bite the bullet and shut down at year end for a complete inventory audit. With the advent of new technology like web-based applications and shared data we are seeing the traditional audit go the way of the dinosaur.
Business Strategy for Automating Inventory Audits
In his monthly series on supply chain management for FM Business Daily, Johnson provides useful and easy-to-implement business strategy advice about how to use automation and business savvy to successfully and accurately manage complex industrial supply chains.
This month’s burning question about inventory audits is an obvious but important one, “Where do we start?” The answer is simple—start small for big innovation.
A small start can be something as simple as asking key suppliers how they can help with inventory audits and inventory management. Many modern suppliers will have a multitude of solutions. At a minimum, they will be able to provide additional information on package labels, even referencing this information in the form of QR codes or barcodes. When it comes to inventory audits, the more scannable the information, the better. If your supplier can’t deliver these basic services, it may be time to consider a new one.
When considering how to collect this information and translate it into your broader MRP or ERP system, Johnson recommends leveraging mobile apps as opposed to commercial handheld scanners with built-in interfaces. Employees will be much more comfortable operating inside an Apple or Android mobile app, and therefore, much more likely to fully participate.
Not up for commissioning your own mobile app development? Or, does the idea of starting small for big innovation sound “too little too late” for your facility? Then you could consider working with a third-party platform like ShelfAware to optimize inventory management and automate inventory audits.
Click here to read the second installment of Andrew Johnson’s practical business strategy advice on supply chain management.
The article includes four key takeaways for automating inventory audits.
Automate Your Supply Chain for Easier Audits Today
Digitizing inventory doesn’t have to be an expensive or overwhelming task. In fact, with a platform like ShelfAware, suppliers and consumers can reduce their carbon footprint, make more money with less worries, and eliminate stockouts with an easy-to-manage, cloud-based digital vender management inventory system.
Try a digital VMI platform like ShelfAware for a sustainable solution to supply chain management.
Want to learn more about an affordable way to automate your supply chain? Request your free ShelfAware demo.
Too good to be true? ShelfAware is redefining the vendor-managed inventory industry. For this reason, we’re happy to talk to you about how our intelligent inventory platform can benefit your business. Contact us today for more information.
