How to get control of your inventory
An out-of-control tool inventory is a more common and costly problem than many machine shops realise. Fortunately, cost-effective cloud-based software solutions that are easy to use and simple to set-up are now readily available, helping manufacturers to get a handle on their tooling inventories, operate more efficiently and, as a result, boost profits.
What a machine shop does not know about its inventory cannot hurt it… or can it? Could its inventory be killing its profitability? Indeed, the costs associated with an out-of-control tooling inventory are numerous and can be significant.
There are opportunity costs. Space used for storage is space that cannot be used for other purposes, such as a new product line, new machinery or offices. Money tied up in unnecessary assets is money that could be spent elsewhere on profitable endeavours. Huge amounts of time can be spent maintaining and managing tooling inventory, including ordering tools, putting them away, and picking, counting and relocating them. Equipment is required to load and unload inventory, as well as transport tools to their points of use. Further, insurance premiums escalate in proportion to the size of the inventory being held.
Critically, a disorganised tooling inventory can lead to chaotic working practices. A survey of machine shops recently undertaken by Sandvik Coromant found that:
- 30–60% of their tool stock, on average, and is simply stacked by machines, getting in the way of work;
- a large tooling inventory makes it harder to find what is needed — 20% of an operator’s time is spent looking for tools;
- 15% of jobs are stopped or delayed due to a lack of the correct tools;
- 80% of work is performed using only 20% of the tool inventory.
Software as a solution
Traditionally, an out-of-control inventory could be a lengthy and complex problem to solve, but simple and cost-effective solutions are now available. Machine shops are increasingly turning to cloud-based software for the management of their inventories of tools, equipment, assets and personal protective equipment.
Benefits of inventory management software
There are many benefits to the use of such inventory management software. It reduces administration. The process for ordering tools can be automated using intelligent rule-based systems. The ways in which tools move through an organisation and around the shopfloor can be streamlined and controlled precisely.
Using inventory management software for tools, costs can be controlled. Inventory can be made more visible; tooling can be marked as “in use” rather than “out of stock”, for instance — eliminating over ordering. Rules can be set that ensure that operators choose used and refurbished tooling before new. Tooling consumption patterns and spending over time can be tracked so that areas of improvement can be identified.
Further, the use of tooling inventory management software can increase productivity and the amount of time machines can be run. The tools available, where they are on the shopfloor and even the operative that selected them can all be tracked — eliminating time wasted searching for them. Incoming orders and deliveries can also be tracked, and low-inventory alerts and automatic ordering rules can be established so production delays become a thing of the past.
A wise way to cut costs and consumption
CRIBWISE is modular, customisable and easy to integrate, and grants machine shops complete control over their tooling inventory with minimal effort and expense. The software eliminates administrative hassles, eradicates production delays and cuts excessive (often hidden) expenditure.
CRIBWISE customers have reduced their inventory costs by as much as 20% and have cut their tool usage costs by up to 10%. On-hand inventory levels can be reduced by around 30%. When used to manage inventories of personal protective equipment (PPE), consumption of these items can be slashed by almost 40%.