Good inventory management processes are critical to the success of any metal fabrication business—but inefficiencies can sometimes go unnoticed for years.
Even if you follow lean practices, keeping a tight check on your inventory isn’t always easy. You need to have enough materials and components available to avoid stockouts and fulfil your customers’ orders on time and in full as you navigate increasing supply chain volatility and changing market conditions. Yet carrying excess stock, including slow moving obsolete (SLOB) stock, will hit your cash flow and margins.
Metal fabricators increasingly recognize the importance of getting the balance right—which could explain why many are now looking to invest in or upgrade their manufacturing inventory management software.
But you don’t need separate inventory management software when you have these capabilities within your enterprise resource planning (ERP) software, the system that connects all areas of your business from production to invoicing as well as inventory. In fact, managing everything in one place, is a great way to streamline processes and gain better insights by combining data from different departments.
In this article, we’ll look at your ERP can help you to optimize your inventory management processes to stay competitive.
What we’ll cover:
Common inventory management challenges and solutions
How to manage inventory well
How to fix poor inventory management
Common inventory management challenges and solutions
A reliable ERP can solve a lot of your inventory management problems because it offers real-time visibility into inventory levels, enables order and material tracking, and improves overall stock management. Here are some of the challenges you could be facing—and what you can do to tackle them.
Supply chain disruption
Geopolitical tensions have fueled supply chain disruption in recent years—leading to both shortages of some materials and overstocking as manufacturers try to protect themselves from unexpected delays.
An ERP improves visibility into inventory levels, so you know exactly what stock you have available and what is needed, so you can place orders or move stock in plenty of time.
MIE Solutions’ MIE Trak Pro ERP has multi-location management, so even if there is disruption, you can reallocate stock from your warehouses when needed. It improves stock management across sites and warehouses including quarantine, customer-supplied, backflushed, and more.
Stock management
Even without supply chain disruption, stock management is a challenge for metal fabricators simply because of the amount of stock they need to hold as part of their large assemblies. With little oversight over exactly what you’ve got, you can end up with too much stock—it may not be SLOB stock but it still impacts your costs and cash flow.
You need to know how much stock you have available, where it’s located and if it’s running low. An ERP helps you manage this process with visibility of your warehouse and alerts to remind you to order more stock when it’s running low.
With MIE Trak Pro, inventory can be tracked by serial and lot numbers, so you’ll know exactly where it is in production. This enables you to keep customers informed with expected delivery dates and progress, as well as potential delays.
Inventory can be managed via barcodes, using a mobile warehouse application to receive materials and saving time with an automated inventory counting system. You’ll also ensure that information is consistent and accurate by recording by units of measurements such as sheets, coils, length and pounds.
Traceability
Without the right software, traceability becomes extremely difficult, not to mention time-consuming, especially when you have complex assemblies. Whatever sector you supply to, you’ll have to demonstrate full traceability of materials, components and products through the supply chain, especially in highly-regulated industries like defense and healthcare.
An ERP solves the challenge of traceability for metal fabricators because inventory can be traced from receipt of materials, through to consumption and delivery. It’s achieved using serial and lot numbers, and barcodes on the shop floor. If any product or part is recalled, you’ll have data on all customer orders, impacted components and supplier details, helping you speed up response times and remain compliant.
“MIE Trak allows us the ability to give real-time tracking info to our customers about the status of their order. We can see how many parts have been completed, or what manufacturing stage they are currently at, and provide that information quickly over the phone or email without leaving the office. We are able to exercise full control over the shop via the system and communicate all aspects of the manufacturing processes to customers and suppliers.”
- James W. at Superior Steel Fabrication
Access to real-time data
Metal fabricators may have siloed data across departments such as purchasing and production, which leads to inaccurate stock levels and mistakes like double-ordering materials or overstocking. This can have a big impact on your profitability especially if the raw materials or components are expensive, or have a limited shelf life.
An ERP joins up your departments, so planning, production, inventory and sales teams have access to current inventory levels. This prevents mistakes like double-ordering and helps teams to make informed decisions like the right time to purchase raw materials.
You can also let your customers know when orders are likely to be delivered, based on material availability to better manage their expectations.
Unpredictable demand
Metal fabricators are facing unpredictable demand, with rising energy costs and material shortages putting pressure on orders. You need to be well prepared for spikes in demand, without overstocking.
Improve demand forecasting by connecting your teams, for example, planning, purchasing and production, have access to the same real-time data, so they can respond quickly to market changes and make more informed buying decisions. Multi-location tracking also helps you relocate stock from one warehouse to another, if demand increases in a particular location, preventing expensive emergency orders.
Overview
| Inventory management challenges | Solution |
| Supply chain disruption | ● Improve visibility into inventory including buffer stock
● Raw material and order tracking ● Multi-location management, so stock is easily relocated if needed |
| Poor stock management | ● Greater visibility into stock levels
● Traceability with serial and lot numbers ● Automate receiving goods and digital counting system ● Record inventory accurately |
| Traceability | ● Real-time tracking of orders from raw materials through to delivery
● Track components and raw materials on the shop floor |
| Access to real-time data | ● Accurate, current data on inventory to improve decision making |
| Unpredictable demand | ● Connected system that improves collaboration across departments
● Live data to respond to market changes ● Multi-location tracking to help you meet demand |
How to manage inventory well
To optimize inventory management, you need the right tools and processes in place to maintain adequate supplies while staying in control of costs. You can do this by enabling:
- Real-time visibility into inventory levels
- Multi-location management
- Traceability
- Material and order tracking
- Automation and tools like mobile warehouse application
- Single source of truth
- Collaboration
Customer case study: Upside Innovations
Upside Innovations, based in West Chester, Ohio, supplies aluminum ramps, steps and canopies to the commercial sector—but it was struggling with maintaining accurate inventory because the team was relying on spreadsheets and manual methods of counting.
It implemented MIE Trak Pro, using the inventory management module, MIE Product Configurator and production-tracking modules to manage its warehouse and create custom orders. The business now has a good inventory management process, is able to track raw materials and finished goods, while eliminating manual data entry.
“We are up another 50% in revenue since implementing MIE Trak Pro.”
- Kevin Sharp, president at Upside Innovations
Read the full case study.
How to fix poor inventory management
To fix poor inventory management, metal fabricators need a reliable ERP that offers fast insight into inventory levels and enables order/material tracking. While inventory management tools are a great solution, an ERP goes a step further by integrating inventory management with other functions (such as purchasing, planning, production and customer service, giving teams full oversight of what’s happening across the business.
Find out how to improve inventory management with MIE Trak Pro.
