Have you calculated how much your business spends to hold inventory? Holding inventory likely costs you up to 30% more than the products actually cost.
Lean stock management systems can help you reduce expenses and improve efficiency. You’ll become more competitive.
Learn some of the best practices for automotive stock management. Therefore, you’ll find out how better inventory management will improve your performance and your bottom line.
Improve Your Stock Management to Improve Your Performance
Inventory best practices help you address challenges in the automotive supply chain. You can avoid manufacturing delays when you improve inventory visibility and parts routing.
You’ll be able to adapt more quickly to disruptions from external factors. Political, economic, and environmental factors impact your supply chain. Changes in the marketplace also play a role. Contingency and risk management plans reduce the possible negative effects.
You can lower costs and increase efficiency. You can also reduce or eliminate problems from parts failures and product recalls.
Just-in-Time Inventory System
One strategy for improving your stock management is a just-in-time (JIT) inventory system. JIT originated at Toyota and is nicknamed the Toyota production system.
JIT inventory management means that you order goods and receive them only as you need them. You receive stock to keep production running to meet actual customer demand.
Therefore, you can implement just-in-time inventory management on its own. It can also be part of a larger lean manufacturing plan. Successfully transitioning to a JIT system requires several adaptations to your manufacturing process.
First, you need to fully understand your sales cycle. This lets you accurately forecast changes in demand.
Second, your production system should be extremely reliable. You have to avoid breakdowns or other problems. That way you can manufacture and supply goods on a tight schedule.
Finally, you need to develop strong relationships with reliable and efficient suppliers. Using top-quality suppliers helps ensure that you’ll get the parts you need at the right time.
Inventory Management Software
Automotive inventory management software can improve your stock management. It gives you tools to create a leaner system. Inventory software includes features like:
- Lot and serial number management
- Real-time inventory tracking
- Barcode tracking
- Integration with accounting software and other business applications
Centralized inventory tracking lets your team members see item location information. As a result, you get real-time stock counts and set up optimize stock levels.
You can also set a reordering threshold. The inventory software will then calculate when you need to reorder. The system sends you an alert so you can avoid stock-outs.
Automotive inventory management software simplifies your purchase planning. You get clear visibility into your manufacturing performance.
Effective Risk Management
Lean stock management systems expose you to greater risk than traditional stock management. Any delays in product deliveries can bring your production line to a standstill. A risk management plan helps you minimize the negative consequences of supply chain disruptions.
You first need to identify the potential risks. Then you can prioritize them. For instance, you can rank risks according to several factors:
- The size of their impacts
- The likelihood of their occurrence
- How easy it would be to resolve them
After that, this lets you create contingency and risk mitigation plans with your suppliers. In other words, plans can include backup manufacturing or alternative logistics providers.
Finding the Right Suppliers
Inventory best practices will only get you so far without the right suppliers. For consistent stock management, you need suppliers who are reliable. You need high-quality parts on time, every time.
For your plastic molded components, Nova Stevensville is ready to be your partner. Therefore, we’ll work with you from design to delivery. We’re experts in quick turnarounds, and we have gold-standard recognition as a Tier-1 automotive supplier.
So, Request a quote today and let’s get started.