Keeping track of inventory is a complicated and oftentimes costly process, and as your business grows and your production increases, it gets a lot more complicated. For those in the steel and metal distribution sector, maintaining firm control over your inventory could be the difference between success and failure; the only thing keeping your margins in the black.
So, what are the best strategies for inventory management in steel and metal distribution? What can manufacturers and steel service centers do to increase efficiency?
Lean on Modern Technology
We’ve come a long way from the days of spreadsheets and manual data inputs. Enterprise resource planning (ERP) software has been around for decades, helping companies to simplify and strategize, but in the last few years, with the rapid development of AI and machine learning, we’ve seen some radical developments.
Using ERP solutions like RealSTEEL™, metal distributors can track their inventory in real-time, from the moment raw materials enter the warehouse to the point they are shipped to the customer. And with extensive reporting, comprehensive insights, and automated calculations, companies can understand their production better than ever.
ERP solutions can be expensive, and costly hardware and setup fees mean it was once the reserve of big companies with sizeable tech budgets. But these days, cloud-based alternatives make it more accessible, even for new and small manufacturers. RealSTEEL™, for instance, is entirely cloud-based and scalable—you pay for what you need and leave out what you don’t.
Keep it Simple
With dimensions, grades, finishes, and other attributes to track, inventory management can get complicated. But it doesn’t need to be.
Adopt lean manufacturing processes to simplify your product lines and consolidate your SKUs. Focus on your most in-demand products and don’t add unnecessary lines and complicated customization options.
This simplification should also extend to your production, whether that means reducing changeover times or switching to a more modular approach. You don’t need a complete overhaul, but by studying your current inventory management and production using ERP features, you can find areas where you’re wasting time, money, and space, and then optimize.
Optimize Your Warehouse Layout
When was the last time you changed your warehouse layout or production approach? Your business may have grown or changed since then, so it’s time to get back to the drawing board and see how and where you can improve.
Find more optimal ways to organize your inventory, such as by grade or turnover rate, thus improving retrieval times and reducing warehouse congestion. Check your labeling system and ensure your workers can retrieve products at a glance—even if you’re only saving a few minutes at a time, it adds up to a lot of wasted labor hours over the year.
You may also want to consider systems such as first-in, first-out, which focuses on shifting older stock first on the basis that it will be used sooner. It’ll simplify your accounting while also reducing waste.
Use Demand Forecasting
Demand forecasting uses historical data (such as sales data and seasonal trends) to predict in-demand items. Armed with this information, you can predict and prepare for increased demand, buying more of the stock you’ll need and optimizing your warehouse layout to ensure it’s always within reach.
ERP solutions collect data from your business and can also process trend and competitor data, effectively automating demand forecasting and eliminating the risk of bias and human error.
Improve Your Inventory Management with RealSTEEL™
RealSTEEL™ is a cloud-based, scalable ERP solution designed specifically for the steel and metals sector. We worked with industry experts to develop software tailored to the exacting needs of metals manufacturers, with various integrations and features that can optimize your business and help with everything from inventory management to financing and purchasing.
To learn more about RealSTEEL™ and see what it can do for you, contact us today and request a demo.
