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Nancy Powaga
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November 14, 2019

A Guide to Inventory Control for Manufacturing

In a recent post, we dug into Industry 4.0 and how manufacturing leaders can leverage their workers to inspire digital transformation in their organizations. Now, let’s explore how the principles behind Industry 4.0 are already contributing to one central aspect of manufacturing: inventory control.

In the simplest terms, inventory control in manufacturing maintains the equilibrium of parts, equipment, and raw materials which go into the production of final products. Effective inventory control reduces manufacturing carrying costs, eliminates waste and delays, and increases worker and plant productivity. The practice also extends to the transportation of materials and final products between vendors, warehouse, and final customers.

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Clearly, inventory control makes up the nuts and bolts of manufacturing. Considering the vast number of moving parts and processes involved, precise inventory control requires superhuman attention to detail. Enter smart technology.

Digital transformation and inventory control

Digital transformation has already impacted key areas of manufacturing inventory management. Let’s explore how technology can help professionals optimize and control three central types of manufacturing inventory: direct materials, works-in-progress, and finished goods.

Direct materials

Also known as raw materials, direct materials are everything that goes into the manufacturing of a product. A textile manufacturer, for example, uses wool, cotton, or hemp fibers to produce a final product. Before computers, manufacturers relied on periodic inventory methods, which required workers to track materials by hand. Needless to say, this approach was error-prone and time-consuming.

Nowadays, perpetual inventory tracking systems handle this work on a — you guessed it — perpetual basis. Inventory tracking apps and software integrate with barcode and optical character recognition (OCR) scanners (often available through a field worker’s mobile phone), cloud databases, and data visualization to track raw materials in real-time. This way, managers and workers alike can always know exact inventory levels on hand, information that’s invaluable when it comes to order planning, maintenance, budgeting, and revenue projections.

Copy and customize AppSheet’s Manufacturing Inventory sample app which tracks raw materials and auto-calculates inventory levels to reflect sales and production data.

Works-in-progress

There are numerous points in any manufacturing process where a product remains incomplete. The tracking of these work-in-progress assets is crucial for successful manufacturing inventory control. Aside from keeping track of a company’s physical assets and capital at a given moment, work-in-progress inventory control provides valuable information on the efficacy of processes and managers. Use inventory control software that's compatible with barcode scanners to record work-in-progress inventory over time. The accumulated data can be used for cost-benefit analyses, workforce optimization, and people management.

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Try out AppSheet’s barcode scanning feature for yourself with our Scan and Search sample app.

Finished goods

Final goods and products are ready for sale or distribution, but still count as inventory to the manufacturing company. Tons of nuance applies to finished good inventory. Various considerations apply to inventory that’s yet to be sold to customers, as opposed to inventory that’s already been sold.

For example, some customers only own goods once they have been delivered. Other goods are owned as soon as they leave the manufacturer’s loading dock. It’s unwise — or even impossible — to track finished goods inventory without the help of dynamic delivery tracking.

Explore and customize AppSheet’s Package Delivery Management app to fit your inventory needs.

Conclusion

All the factors that go into manufacturing inventory control can make a person’s head spin. In addition, no two manufacturing companies have the same processes or use the same materials. Thankfully, technology is rising to meet these complexities. This push includes the resounding progress in the arena of apps in the workplace, which are both customizable and powerful.

Let us know your questions and strategies around inventory control in the comments. We’re excited to hear from you.

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