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| Why Inventory Optimization is Better for the Environment |
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Wise planning through inventory optimization is not only good business sense for company profits, but also allows for the immediate use of natural resources with a policy of supply and demand to mitigate waste. In a network where raw materials are the key commodity, each and every stage of customer requisitions and company stock ordering can be tracked and provided for with minimal risk of waste.
Through the advent of smart software, a company will be able to monitor stock quantities and be alerted when the supply level becomes too low. Conversely, when seasonal or economic factors have repercussions on the sale, employees are able to gauge the trends and order their raw materials at precisely the right time. With greater inventory control, manufacturing can be better prepared for its workload, and often trimmed to essential activities for the moment. Not only is there a savings to the material costs, but a substantial payroll curb saves thousands at the end of the month.
Plants and distribution centers that are feeling the weight of inventory control may have sufficient resources and manpower, but may be lacking in communication to make themselves more responsive to supply and demand. Gaps between sales, shipping and ordering can slow a hard working company to a crawl when inventory optimization is put on hold.
To optimize in every way, be sure to utilize your full capacity for batch sizes and be mindful of alternative transportation of product. Although filling a truck to capacity is important for carbon emissions, rail service is even better for large shipments going a long distance.
When programming the inventory software, be sure to account for demand-related criteria such as seasonal usage, forecasting errors, product return, consumer trends, special promotions, and samples of new product. With all manufacturing checkpoints finely tuned, the execution of product delivery will make a substantial impact on the company's carbon footprint. In addition to plant production, distribution may best be served by inventory optimization to keep the right amount of product at key locations. With a master plan system in place, there is room for carbon emission footprints to shrink, with the ideal quantity of product delivered like clockwork. No more emergency backup of half loaded trucks or routes that wander aimlessly about town. Plan your work, and work your plan with fast and efficient logistics from smart software. |
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abas, Axapta, baan erp, costs, crisis, ERP, Fujitsu, Glovia, infor, Lawson, RJT, S3
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ERP system - Enterprise resource planning, is an enterprise-wide information system designed to coordinate all the resources, information, and activities needed to complete business processes such as order fulfillment or billing.
An ERP system supports most of the business system that maintains in a single database the data needed for a variety of business functions such as Manufacturing, Supply Chain Management, Financials, Projects, Human Resources and Customer Relationship Management.
An ERP system is based on a common database and a modular software design. The common database can allow every department of a business to store and retrieve information in real-time. The information should be reliable, accessible, and easily shared. The modular software design should mean a business can select the modules they need, mix and match modules from different vendors, and add new modules of their own to improve business performance. Wikipedia
SCM - Supply chain management is the management of a network of interconnected businesses involved in the ultimate provision of product and service packages required by end customers (Harland, 1996). Supply Chain Management spans all movement and storage of raw materials, work-in-process inventory, and finished goods from point-of-origin to point-of-consumption (supply chain).
Ideally, the data for the various business functions are integrated. In practice the ERP system may comprise a set of discrete applications, each maintaining a discrete data store within one physical database. Wikipedia
CRM - Customer relationship management, consists of the processes a company uses to track and organize its contacts with its current and prospective customers. CRM software is used to support these processes; the software system can be accessed, and information about customers and customer interactions can be entered, stored and accessed by employees in different company departments. Typical CRM goals are to improve services provided to customers, and to use customer contact information for targeted marketing. Wikipedia
While the term CRM generally refers to a software-based approach to handling customer relationships, most CRM software vendors stress that a successful CRM effort requires a holistic approach. CRM initiatives often fail because implementation was limited to software installation, without providing the context, support and understanding for employees to learn, and take full advantage of the information systems. Wikipedia
MRP - Material Requirements Planning, is a software based production planning and inventory control system used to manage manufacturing processes. Although it is not common nowadays, it is possible to conduct MRP by hand as well.
MRP II - Manufacturing Resource Planning, is defined by APICS as a method for the effective planning of all resources of a manufacturing company. Ideally, it addresses operational planning in units, financial planning in dollars, and has a simulation capability to answer "what-if" questions and extension of closed-loop MRP. Wikipedia
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