Effective supply chain management is needed to be profitable in the warehousing industry. Companies have moved beyond spreadsheets and are using integrated software tools for their distribution automation to become more strategic and customer driven; but the best warehouse management tool is only as good as the data that is put into it. That is why it is important to automate the data collection process in the warehouse.
With growing costs, new competitors, demanding customers, and very small margins, successful distribution centers need extremely effective supply chain management to separate themselves from those that are struggling. With Scanco warehouse automation tools combined with enterprise resource planning software like Sage 100, you can increase the efficiency of the entire warehouse process including purchase orders, sales, inventory management, and customer support.
Warehouse management can be a complex task. Balancing inventory levels is a challenging balancing act in and of itself. Too much inventory can result in resource waste and the risk of products becoming obsolete over time. Too little inventory can mean losing potential customers due to lack of supply. The supply chain goal is to more effectively buy and stock as little inventory as possible by choosing instead to quickly source, ship, and deliver product on premises or to the customer. To accomplish this, every warehouse manager needs to accomplish these three tasks:
Anticipate and Forecast Market Demand Accurately
Accurate demand planning is critical in order for distributors to increase margins in today’s dynamic business environment, but companies may lack immediate access to consumer demand patterns. For this reason, demand planning systems include advanced forecasting capabilities that anticipate future inventory needs based on many factors. These include demand history, customer orders, new product introductions, and forward buying opportunities.
Reduce Safety Stock Levels
When working to improve margins and offer value-added services, distributors must establish new methods for controlling inventory levels. Too much inventory creates excessive discounting and possible obsolescence. Too little inventory (or inventory in the wrong location) causes missed sales revenue. Many organizations are moving away from old approaches to setting inventory targets, such as holding two weeks of supply for all products at a location. Instead, inventory planning, for example, sets inventory targets at a single location by taking into account time-phased demand signals and service level requirements. This removes to the temptation to have too much inventory on hand “just in case” because the actual inventory need is based on actual data not feeling.
Buy Inventory on an As-Needed Basis
In an industry that tends to be dominated by buyers, it’s no surprise the default driver is purchase price. With a broad inventory portfolio to manage, a huge number of SKUs, and an orientation toward high stock positions, it is natural that the emphasis is on buying at a good price. Procurement optimization automates the balancing act that buyers typically do manually delivering a more accurate and organized view of information such as how much supply is actually on hand, what has been ordered, as well as the status and lead times of incoming products. This allows the organization to make more informed decisions such as assessing quantity price breaks based on dollars or points against how long excess inventory may have to be held.
Scanco has experience with helping thousands of companies improve warehouse management processes. Our product, Scanco Warehouse for Sage 100 enables you to automate your supply chain and provide the accurate data you need to better anticipate market demand, reduce safety stock and optimize your procurement. Contact us to discover how technology can improve your accuracy and performance.