Doing more and doing better with less, part 2: Inventory

There’s a good selection of digital tools you can use today to help save time and money.

This is the second instalment in a series of three articles designed to show you how to put digital tools to work in managing your business more effectively. (Read also the first  article related to wood purchasing)

Doing inventory manually put limits on any plant’s development

Even in the short to medium term, any wood-processing operation that still does its inventory manually is at serious risk of being left behind. It really comes down to a question of survival to be able to reliably know in real time what you have in inventory at any time so you can organize your production and manage your sales more effectively.

Before EFFECTO, many users would tell us they would spend at least several days a month making the rounds trying to get an accurate count of the wood they had in stock…and never get it right anyway. Manually counting and tracking on paper with multiple Excel files takes an incredible amount of time and is a source of errors on a daily basis, and a true horror story when yearend inventory comes around. The most common problems encountered include:

• Costly administrative resources dedicated solely to entering endless production and consumption inputs and outputs
• Cannot reliably plan sales and production because data is never accurate in real time
• Production planning errors due to last-minute changes
• Sales errors and failure to meet deadlines

While the impact is primarily financial, errors and wasted time also affect efficiency and employee morale.

Serialized inventory is the cornerstone of success in production and sales

Serialized inventory is an easy-to-use, well-known industrial principle that is especially important in the wood industry. It consists of applying an identification system on a shipment (barcode label or RFID chip with a unique number) with details on the contents. It allows you to trace the entire path of a finished product, from wood purchasing to shipping. Each stage in consumption or production is scanned at operator workstations or read by RFID sensors in a foolproof (read also the article about connected trash bins) and often fully automated process.

Phenomenal increase in efficiency

Aside from eliminating data-entry errors, integrated technology for automating and managing has a ton of benefits, including :

• Producing inventory updates in real time any time
• Cutting production planning time by 50% to 75% thanks to precise inventory counts
• Eliminating weekly and monthly inventory checks since you need only one count at the end of each accounting period
• Better anticipating and accelerating your sales cycle
• Improving drying quality since you only need to dry enough to satisfy scheduled deliveries a few days in advance