Intelligent Services Clue
As part of the clothing industry, maintaining stock is an essential part of Spindl’s business. After all, the clothes they manufacture make use of a large chunk of the company’s cash flow. However, because of the sheer scope of the operation, manually keeping track of things has made them prone to a plethora of problems. Some of the issues faced by Max’s department, Procurements and Inventory, are inventory shortage, quality control issues (with incoming materials and outgoing stock), managing returns, etc.
To tackle these issues, Max decides two concepts need to be followed:
The Inventory part, Lyn explains, will build upon the two concepts. Let’s see how.
For most businesses that deal in physical goods, inventory management is a key business function. Using an ERP makes it much easier to gain complete control of your inventory. You can:
This helps you to avoid inventory shortage, manage quality inspection, and pricing, create and maintain variations of items, virtual warehouses, serialization, batching, etc. and ensure your business runs smoothly. The inventory module is tightly integrated with Purchase, Manufacturing, and Accounting modules.
Here are some key components that are a part of the Inventory Management workflow.
A Warehouse is any storage location that’s used by your company. It’s not limited to physical space; virtual Warehouses can be created for organizational purposes.
The following three transactions serve as the core elements of a functional inventory management system:
A Purchase Receipt is made when you accept Items (e.g., materials) from your Suppliers against a Purchase Order. This marks the Items as ‘received’ and a part of your current stock.
A Stock Entry is a simple document that lets you record Item movement from a Warehouse to a Warehouse, and between Warehouses. This is useful in tracking Material Issues, Sales and Purchase Returns, Manufacturing, etc.
When Item(s) are shipped out to Customers, a Delivery Note is used to mark this transaction.
Some Items have Quality Inspection as a criterion before they can be transacted. When enabled, this prompts users of the system to ensure QA takes place before the Item(s) are transacted with. This works for incoming and outgoing products. Details such as the sample size, inspection criteria, remarks, etc. can be entered into the system during Quality Inspection.
Serialization allows the user to assign each stock item a unique Serial Number. The Serial Number helps maintain and track the location, warranty, expiry, and other information about the Item.
A Batch is a consignment of Items produced at one time. Batching allows you to group multiple units of an Item and assign them a unique identifying tag. When used with Serialization, this enables you to track warranty and returns, trace individual Items in case they’re being recalled by the Supplier, manage expiry dates, etc.
When implementing an ERP, part of the data upload is Stock Reconciliation. This updates your business’ stock for any given Item on a given date for a given Warehouse to the given quantity. The first time you enter this data into the system, you log in to your ‘Opening Stock’. Stock Reconciliation can also be used once your
To be surrounded by data and starved of insights is futile – this especially rings true when it comes to business growth. Maintaining inventory accurately is a necessity, yes, but being able to analyze your processes (and the patterns that lie within) can provide you with great insights into your business. With that in mind, let’s take a look at the key Stock Reports you can generally access using an ERP – and why they might be helpful.
The Stock Ledger is a record of every transaction made using stock Items. Every Stock Ledger Entry has the Item Code, Serial Number, Batch Number, Warehouse, and all other details about the Item.
The Stock Ledger’s information lends itself to an incredibly comprehensive report of the inflow and outflow of material across the Warehouses of your company, called the Stock Ledger Report. It sounds simple enough but is perhaps one of the most useful and knowledge-laden resources available to you. The Stock Ledger’s oceanic information will grant you deep insights into your business.
As is the case with most reports in an ERP, you have the option to filter the report to be as birds-eye-view or as granular as you need it to be.
This report breaks down your Stock data by listing Item wise – Warehouse wise Stock level of an Item.
It shows you:
All of the above parameters are used to calculate the Projected Quantity.
Projected Quantity = Actual Quantity + Ordered Quantity + Indented Quantity + Planned Quantity – Reserved Quantity – Reserved for Production – Reserved for Subcontract
The projected inventory is used by the planning system to monitor the reorder point and to determine the reorder quantity. This is incredibly useful for planning and monitoring your Inventory, and maintaining safety stock levels (in case of an unexpected surge in demand).
The Stock Balance Report is useful when you need to check and analyze the Stock Balance of an Item on any given date. It pulls all its data from Stock Ledger Entries. Along with an Item’s stock levels, you also get its valuation in this Report, along with the In and Out Quantities for said Item!
Akin to using a virtual time machine, you can go back and study your stock balance as and when changes take place.
This Report comes in handy for the filtered Balance History of a specific Batch of a specific Item. The data, again, is pulled from Stock Ledger Entries.
While completing data migration for implementation, Lyn and Max made sure to upload Spindl’s inventory data. This meant they’d established the Opening Stock. Max’s department is now ready to use a new workflow to manage stock and inventory.
Now that the ERP tracks and maintains the inventory location, value, and quantity in real-time and is easily accessible to Max and his team, their work is easier. The time that was utilized in switching between spreadsheets and creating reports manually or dealing with inventory shortage and finding lost inventory is now used in planning for inventory in advance and making smarter decisions.
With the order status getting updated automatically on receipt creation, Max has better visibility and works stress-free. Mel and Saf notice the processes getting cleaner. The work environment at Spindl also gets lighter since the team has a transparent and reliable inventory management system to work with.
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