Strategies to prevent costly tooling stockouts

With the human coronavirus (covid-19) pandemic, the energy crisis, the war in Ukraine and even the temporary blockage of the Suez Canal, the last few years have exposed the vulnerabilities of global supply chains. As such, many manufacturers and machine shops have, at times, found themselves without the critical stocks of raw materials, tools and consumables they need to carry-out their work effectively. These issues have been compounded by the usual suspects: poor forecasting; the mismanagement of suppliers; and: ineffective inventory management.

The dangers of stockouts 

Tooling stockouts, in particular, can cause severe headaches. Deadlines might be missed, and extra costs might be incurred because, for want of a particular tool, production operations must stop while the required item is tracked down, purchased and shipped.  The temptation might be to make-do with the tools on hand, even if they are suboptimal for the job, but this can compromise the quality of the parts being produced. Accordingly, scrap rates and the amount of post-processing work required might increase, which can further delay production and increase costs. As such, tooling stockouts can have a profound impact on the profitability of machine shop.  

Preventing stockouts 

Fortunately, there is much that managers and owners of machine shops can do to prevent stockouts from happening.  

 An effective enterprise resource planning (ERP) system is essential for any modern machine shop. These can assist in the monitoring of inventories and the forecasting of any fluctuations in demand, enabling owners and managers to make informed and timely business decisions. 

The adoption of lean manufacturing principles can also be of immense help. When a facility implements lean fully, surprises become a thing of the past. Associated housekeeping regimes, such as 5S (sort, straighten, shine, standardise and sustain) will help to prevent stockouts.  

Affordable software solutions 

Machine shops can also adopt affordable and easy-to-implement cloud-based inventory management software, such as CRIBWISE, to manage their tool cribs. When used in conjunction with smart vending machines and tool cabinets, access to tools can be controlled. This enables tools to be tracked on the shopfloor, eliminating losses, hoarding and theft, and allows the cost of tools to be allocated to the specific jobs for which they were used. The ordering and receiving of tools can be highly automated, slashing administrative costs. CRIBWISE can also be integrated with ERP systems.  

Further, CRIBWISE is getting smarter. We have created a new feature within our software called Stock Optimization. As the name suggests, this AI-driven function optimises a shop’s stocks of consumable items—ensuring that production operations can go ahead as planned and dramatically reducing time needed for purchasing. CRIBWISE Stock Optimization ensures an equal or better degree of optimisation than even the most experienced of users doing it manually. 

To find out how CRIBWISE can help you to make stockouts a thing of the past, click here.