Lean principles are strategic processes put in place in order to maximise efficiency in companies making and selling goods. The idea is to cut down on waste or even eliminate it entirely, to increase productivity, output and profitability. When correctly implemented, being lean has a hugely positive impact on all elements of a business and helps to make it perform much more competitively in the market. The basic concept is to identify any areas where excess time, money or effort is being invested unnecessarily and repeatedly, and work to resolve these issues to become more efficient. One of the easiest and fastest ways to kick start lean thinking is by implementing a warehouse management software - this can either be a standalone package or integrated as part of a multi-functional ERP system.
There are 5 core areas for consideration when it comes to implementing lean principles and ERP software for stock control: -
Where’s the value?
Work out what it is you want to gain from applying lean principles to your inventory management. Do you want to be sitting on 50% less stock in a year’s time? Do you want to half the amount of time it takes to dispatch a delivery? How much money will this save or add to the business? It’ll be easy to find the answers to these questions and to place a monetary value on your inefficiency using ERP; just make sure the objective(s) set are specific to what you want to achieve, attainable in a sensible timeframe and measurable. This way you’ll be able to monitor your progress month on month against the objectives and easily report back to investors and shareholders.
Go with the flow
Assess the way in which your inventory systems work.Think of the journey of an item through the warehouse and identify key hindrances and obstacles. The stock should be able to flow through the process easily; if it is continually getting held up then you need to assess this problem. An ERP or warehouse system can provide you with all the information from all the departments to help you make the necessary efficiency improvements.
Pull, don't push
Don’t touch that box! The more times an item in your warehouse is touched or moved, the more costs you are incurring. Only move your stock if you are being driven by a customer and will see the returns on your efforts. ERP software can help you to trace the journey from goods received to dispatch and highlight any unnecessary stock moves which might have happened along the way.
Can you adapt to change? How flexible is your inventory system at coping with urgent or out-of-the-blue enquiries? Think about what you could do to make your stock management system more flexible. What are the reasons that you would normally say no to something? Work out a way to solve those problems in advance. The range of functionalities available within ERP software should help you to prepare for the unexpected and will make previously laborious and painstaking tasks much easier and faster.
Strive for perfection!
Keep identifying areas where you could be doing better and offer solutions to any issues which are noted. These problems should be getting smaller and smaller the further along the lean process you become, but each time you make a change you’ll be increasing your competitiveness in the market. With constant updates, ERP will continue to show you new ways of doing things and will help to keep refining your processes day in, day out. As you repeat the lean principles over and again, you’ll become more and more efficient, and ERP software will be there to help measure your successes. Knowledge is power, and the more data you can access about your current processes, the easier it will be to identify areas for improvement.
If you're looking to implement ERP software for effective inventory control and a lean and agile supply chain, contact us at WinMan today.