Manufacturers face many production and distribution challenges. Running a profitable plant requires effective management of supplies and on-time shipments. The execution must be precise based on real-time information. Everyone needs the right information at the right time.
Managing labor costs and procuring the best possible supplier relationships can be a daunting challenging. However, there are effective cost control solutions that incorporate lean principles, streamline production processes and eliminate waste.
Managing Labor Costs
Labor costs can be reduced by implementing software that provides real-time information to implement less labor-intensive inventory control.
Software can minimize distribution inefficiencies associated with receiving, stocking, picking, and shipping products by determining the optimum warehouse layouts. Streamlining these actions to remove redundant steps and reducing the number of “touches” on each item improves efficiency and safety, effectively lowering payroll.
The administrative costs involved in creating, monitoring, and arranging purchase orders, sales orders, and shipping procedures requires instant communication. Innovative software solutions integrate every aspect of the supply chain, removing multiple, or duplicate PO occurrences, and other distribution challenges, such as regulatory compliance by providing better visibility across the order to ship process.
Managing Materials and Inventory Costs
The cost of goods for components, parts or materials required for production or assembly affects the final product profit margin. In addition, the expenses incurred by stocking and maintaining large amounts of inventory can be exorbitant.
A single source providing “vendor managed inventory” often works well for production facilities that receive the majority of goods from one supplier; however, those who operate with multiple vendors must discover alternative tools that minimize the cost of materials.
Software designed to implement customized supply chain management procedures can unite multiple vendor orders, and develop inventory strategies such as just-in-time, to systematically organize shipments for lower delivery costs, and effectively eliminate carrying costs.
SBS Group helps manufacturers improve operations by optimizing processes and implementing technology that can reduce cost and increase cash flow. Learn more about managing inventory costs in just 15 minutes, with our free On-Demand Webinar!