The pandemic changed the way we do business, especially for manufacturers. From overnight supply and demand changes to production shutdowns and logistical challenges, manufacturing companies across the globe suffered from severe supply chain issues. In fact, according to Fictiv’s 2021 State of Manufacturing Report, 94% of manufacturers surveyed cited concerns about their supply chain in 2021. So how can the manufacturing industry recover from these setbacks, or fulfill increasing demands? The answer is inventory management.
How Can We Better Manage Inventory?
COVID-19 was a wake-up call and a prime example of how inventory supply can be easily disrupted if not managed well. While the labor market and product demand may be bouncing back, transparent inventory management can help recover from 2020 losses and keep up momentum in years to come. Below are a few ways to get your inventory back on track.
Use an Inventory Management System
The ability to see inventory levels in real-time is an asset that will benefit manufacturers in many ways. It’s critical for all levels of the organization to have full visibility into inventory levels and manage everything from purchase orders to stock levels. Manufacturers need to have a robust inventory management system that can provide the data they need while also integrating with your accounting system, such as QuickBooks. This system will help ensure you are avoiding a lack or surplus of inventory and quickly adjust to any supply chain barriers that arise.
Check Inventory Level More Regularly
Pre-pandemic, many manufacturers monitored inventory levels on a monthly basis. With demand changing more quickly and supply chain bottlenecks becoming more prevalent, evaluating inventory on a weekly basis can help businesses try to understand trends and make quick changes when needed. This allows manufacturers to keep a pulse on where demand is going instead of only looking back on historical trends.
Create Back Up Plans
If 2020 taught us anything, it’s to prepare for the unexpected as much as possible. Manufacturers can carry this mentality to their inventory and relationships with suppliers and distribution facilities. Analyze your inventory processes and supply chain to identify any potential weaknesses. Are you missing proper inventory controls, leaving your company open to fraud? Or did you run into issues with vendors or distributors last year that could be avoided by having back up relationships? While you can’t prepare for everything, there are things you can do to mitigate risk and reduce the impact if disaster strikes.
To discuss how your business can implement better inventory management or controls, contact an Anders advisor below. Learn more about our COVID-19 Business Recovery services or how we work with manufacturers and distributors.
