Have you ever faced challenges in managing inventory effectively as a manufacturer in Singapore’s thriving industrial landscape? For many manufacturers, the complexities of inventory control often pose significant hurdles, impacting production efficiency, costs, and overall business performance.
Recent studies reveal that efficient inventory management remains a pressing concern, with a substantial percentage of manufacturing businesses encountering issues related to overstocking, stockouts, or inaccurate inventory records.
In a competitive market like Singapore, where efficient resource allocation is vital for sustained growth, the need for streamlined inventory management practices becomes paramount.
This article delves into proven inventory management hacks tailored for manufacturers in Singapore, offering actionable insights and strategies to address the intricacies of inventory control effectively
Table of Content
1. Set up Minimum Inventory levels
Make inventory management easier by setting up “par levels” or the minimum amount of inventory necessary to be on hand at all times. When certain items reach or approach predetermined minimum levels, you know it’s time to reorder.
Ideally, you will order items in a sufficient amount to exceed the minimum levels. The minimum inventory levels will vary by product, depending on how quickly the product sells and how long it takes to get the product.
The best way to maintain inventory levels is to take advantage of inventory management software like those designed for specific industries, including inventory management for salon and spa. These specialized software systems not only ensure optimal stock levels but tailor their functionalities to manage unique inventory needs of salons and spas – like managing different beauty products, tracking their usage, expiry, and restocking needs.
2. Conduct Demand Forecasting
To find out the amount of inventory that should be on hand at all times, and avoid unnecessary procurement, overstock, and stockouts, you need to forecast the demand for your products.
Manufacturers can conduct demand forecasting in several ways by involving internal and external factors such as:
- Market trends
- Sales data for the previous year
- This year’s growth rate
- Overall economic conditions
- Upcoming promotions
- Expenditures for planned advertisements
When you use historical sales data, it is important to make sure that the data generated is complete and accurate, so there are no mistakes while performing forecasting. A sophisticated inventory management system has a forecasting feature that allows you to generate forecasts that help you make the right decision for future purchases.
This forecasting capability not only assists in predicting demand but also aids in optimizing inventory levels efficiently. Curious to explore such advanced features and its pricing? Click the banner below to delve into HashMicro inventory management system’s pricing schemes and unlock the potential for better-informed inventory management decisions!
3. Use FIFO Method
First-in, first-out (FIFO) is a critical principle of inventory management. It means that your oldest stock (first-in) must be sold first (first-out), instead of your latest stock. This is especially important for easily damaged goods so you will not end up with unsaleable items.
The FIFO principle can also be implemented on non-perishable products. If the same items are always put at the back, they tend to get obsolete faster. You certainly don’t want to sell something outdated or not worth selling.
To apply the FIFO principle, you need a well-organized warehouse by adding new products from the back or making sure your old products stay at the front.
4. Audit & Conduct Regular Inventory Inspections
Reviewing and conducting regular inventory audits is the best way to find potential problems before they occur. Ideally, manufacturers audit and do regular inventory inspections every month to cover their entire base.
The easiest way to validate your data is to rely on inventory management software and generate reports to find out how many products you have. However, it is important to ensure that the quantities recorded by the system match the physical count of goods on hand.
There are several inventory audit methods you can use:
Physical inventory means counting all your inventory at once. Many businesses do this at the end of the year because they are related to accounting and filing income tax.
Physical inventory can be very disruptive to business processes even though manufacturers do it is usually once a year. It is considered to be less efficient compared to other methods. If you find a discrepancy, it may be difficult to identify the issue, since you have to look back at an entire year.
If you do a full physical inventory at the end of the year and you often experience problems, or you have too many products, you might want to start spot-checking throughout the year. This means choosing a product, calculating it, and comparing the number calculated to what it’s supposed to be. This does not need to be done on a schedule and is supplemental to physical inventory.
Instead of doing a complete physical inventory, some businesses perform cycle counting to audit their inventory. Rather than doing a full count at the end of the year, you can conduct cycle counting to reconcile the number of products listed on the system and the actual number of products throughout the year.
Manufacturers can conduct cycle counting whenever needed; every day, week, or month. Different products are checked in turns according to the specified schedule. There are various methods of determining the number of times a product has to be counted, however, higher-value products are usually counted more frequently.
5. Use ABC Analysis
Some products need more attention than others. Use ABC analysis to prioritize your inventory management. Separate products that require a lot of attention from those that don’t. Do this by reviewing your product list and adding each product to one of the following three categories:
A – high-value products with low sales frequency
B – moderate value products with moderate sales frequency
C – low-value products with high sales frequency
Products in category A need more attention because the financial impact is significant, but the sales are unpredictable. Meanwhile, products in category C require less supervision because they have a smaller financial impact and they are constantly turning over. Products in category B fall somewhere in between.
6. Manage Good Relationships with Suppliers
Establishing good relationships with suppliers is a great way to keep your inventory under control. This way, your suppliers will be more willing to work with you to solve any problems related to your inventory management.
Having good relationships with your suppliers will be very helpful. Manufacturers can negotiate minimum order quantities. Don’t be afraid to ask for a lower minimum so you don’t have to keep as much inventory. Managing relationships with suppliers is possible by adopting a supply chain management system.
A good relationship is not just about being friendly. It’s also about good communication. Let your suppliers know when you’re expecting an increase in sales so they can adjust the supplies to your production planning. Ask them to tell you when there are certain products that they cannot deliver quickly so that you can delay the production and promotion time for the product.
7. Supplier Collaboration and Relationship Management
Establishing robust collaboration and nurturing relationships with suppliers is pivotal in the realm of inventory management for manufacturers.
By forging strong ties with trusted suppliers, manufacturers can optimize their inventory processes extensively. A key advantage of this collaboration is the ability to enhance lead times and ensure timely deliveries.
This cooperative relationship allows for streamlined communication, enabling manufacturers to share crucial information such as sales data, demand forecasts, and production schedules with suppliers.
This exchange of data fosters better inventory planning and enables suppliers to align their production and delivery schedules accordingly. Consequently, manufacturers can reduce the likelihood of stockouts or excess inventory, ensuring a more efficient inventory management system overall.
Moreover, negotiating favorable terms with suppliers, such as flexible delivery schedules or pricing arrangements, can contribute to cost savings and improved operational efficiency for manufacturers in Singapore.
8. Implement RFID Technology for Inventory Tracking
mplementing Radio-Frequency Identification (RFID) technology presents a transformative approach to inventory management, especially in manufacturing.
RFID tags serve as digital identifiers, storing unique information about individual products, components, or raw materials. These tags use radio waves to transmit data wirelessly to RFID readers or antennas placed strategically throughout the production line, warehouse, or storage areas.
This technology enables manufacturers to seamlessly track inventory movements in real-time as items traverse various production stages or storage locations. Unlike traditional barcode systems, RFID doesn’t require line-of-sight scanning and allows for bulk scanning of items, significantly reducing the time spent on inventory checks and manual data entry.
Moreover, RFID enhances accuracy by mitigating human errors, ensuring precise inventory counts and reducing the likelihood of stock discrepancies or misplaced items. The instantaneous and accurate visibility into inventory levels empowers manufacturers to make informed decisions promptly, facilitating optimized resource allocation, streamlined production schedules, and improved order fulfillment.
By leveraging RFID technology, manufacturers in Singapore can streamline their operations, minimize inventory holding costs, and foster a more agile and efficient manufacturing ecosystem.
Finally, in order to track your products that are in supply, you can use The Number #1 Inventory Management System from HashMicro. This software allows you to track your product journey from one warehouse or outlet to another. Increase your accuracy in tracking products, and reduce the chance of delaying production.
This is the greatest hack you can implement easily. But you need to know the pricing scheme calculation of HashMicro’s inventory system before you implement it. With this, you can gain information about the costs you need to prepare. These hacks need to be implemented to optimize your inventory management. Get free demo!