Automation is a practical response to increasing costs. For example, if labor costs rise too high to justify a particular job, then eventually businesses will catch on that they should automate it.
This is how many assembly-line jobs were streamlined and replaced by machines, conveyor belts were introduced to quickly move goods from one area of production to another, and robotic warehouse workers were created to dash between shelves and delivery trucks.
Business automation might seem like an exclusive club that only large corporations can afford to take advantage of, but it’s actually something that small businesses can use just as easily. That’s because automation doesn’t have to be on a grand scale but can be at a smaller level with simple things like barcode scanners, work orders, and automatically reorder points.
It seems like such a minor thing, but typing information by hand is a big deal because it’s so easy to make typos during the process.
When a warehouse worker is going through and performing cycle counts, picking items to fulfil orders, or reordering goods and all they have is a pen and paper or a mobile device that they have to physically type all of the information into, many problems can arise.
What if they enter the wrong part number? A single misplaced digit can lead to major negative consequences down the line.
A barcode scanner solves this problem by eliminating the manual part of data entry.
Workers can simply scan an item’s barcode to pull up its location within the warehouse, quantity in stock, and other relevant information. They can use barcodes to scan in new items, pick them, reorder them, and more. It’s faster and safer than doing it manually.
For manufacturers, how do you ensure manufacturing jobs are handled in the same manner every time and that the finished goods are up to the same level of quality as all the ones that came before them?
A good way to make sure this happens is to add detailed instructions to each work order and save and reuse the same work orders and bills of materials whenever they are needed. That way, even if employees come and go, whoever is working on a manufacturing job will know exactly what is expected of them and how to go about their work.
Raw materials and production stages will be clearly defined so that there is no ambiguity about what is supposed to happen at specific times.
Automatic Reorder Points
Keeping up with inventory quantities is no simple task, especially if you have multiple locations in which you store items.
Rather than waiting until a particular product runs out or guessing how many of a product you should order and winding up with a massive overstock, you can try a more methodical approach to the reordering process.
Look through your sales history (or, better yet, run a detailed report that shows your sales history) to figure out how many copies of a product you should keep on hand to avoid a shortage. You’ll need to know the average number of goods you sell on a daily basis, the number of days it takes to get new ones shipped to your location and the upper limit of how many you are willing to keep on hand to avoid unnecessary carrying costs.
Once you’ve calculated all of these, you can set up an automatic reorder point for that item.
As soon as its quantity gets down to a certain number, your inventory management software can automatically generate a purchase order with the default vendor you’ve chosen and the quantity you’ve determined. You can even make seasonal adjustments so that you won’t wind up with too many sandals in the winter and too many scarves in the summer, for example.
An Automated Approach
Business automation may not come automatically to your small business at first, but if you’re willing to put in a little time and effort at the start, you’ll find that it pays off in the end.
By scanning barcodes, reusing work orders and bills of materials, and setting up automatic reorder points on your parts and products, you will be in a good position to keep inventory flowing smoothly in and out of your warehouse.