During my review of business processes for prospects many times the Material Planner/Purchasing Manager is doing a visual review of the raw materials in the warehouse to verify inventory quantities to either complete purchase orders or create the production schedule. They don't trust their ‘system' numbers. Raw material inventory integrity is often one of the biggest problems that I encounter with prospects.
There could be many reasons why inventory control is such a pervasive problem:
The majority of the companies I encounter with these problems are using two or more systems to manage their business. Sometimes one or more of the business tools is a spreadsheet. I have nothing against spreadsheets as long as they actually tie back to a database that is driven by real transactions. One system for accounting and one system for manufacturing makes no business sense to me. This use of disparate systems can cause many problems; one being inventory control. If you are selling out of one system and manufacturing in another how do you know what your demand is for production? Is someone taking the sales orders and then filling out a production schedule? Then someone is updating one system with the finished goods to ship and invoice… I have to enter vendor invoices into the accounting system to cut checks, but I am purchasing in another system… Confusing? This scenario demands a lot of manpower just to function on a day to day basis.
Simply put, no matter where you’re at as a business, data will greatly define your future success. The more data you accumulate, the better you’re able to make strong, strategic decisions at scale. Starting out, data accumulation, storage and analysis is a manual process. As time goes on, however, an Enterprise Resource Planning (ERP) system is put into place to help out. more