Choosing The Best Inventory MethodsWhen buying an inventory management system, experts say, first map where you want your company to go, then find the Best Inventory Management Practice that will help you get there. Service centers live or die on how well they control their inventory. Increasingly, service-center operators are relying on computer systems to help them buy at the lowest cost and sell at the highest margin.
Inventory management software can perform many functions, and it can be tailored to each company's needs. For example, many service centers rely on their systems to signal when it is time to reorder each item. Some use bar codes to track the movement of metal into and out of their warehouses. Others use more sophisticated systems that allow them to track the cost associated with each sale so they can set prices that allow them to meet preset profitability goals. Before investing in a new inventory control system, experts say, service centers should first set goals on what they want to accomplish. The systems they consider should offer real-time data in a flexible manner so that the system can be tailored for the facility's particular needs. The system must also be scalable so that it can be expanded as the company grows, without deterioration in performance. "A lot of companies don't set a target or goal for what they want a system to do for them. That can be defined without a whole lot of investment," says the national sales manager for Compusource, La Palma, Calif. "The expectations and priorities set before you even begin to look for an inventory management software system are extremely important," adds Dave Cyrus, product manager, Enmark Systems, Ann Arbor, Mich. As a starting point, service centers should quantify their current operations in terms of volume moved, number of transactions, average number of invoices issued per month and so on. Then they should set quantifiable goals for improvement, such as additional inventory turns, the elimination of out-of-stocks, or a reduction in man hours. The software provider should help define these goals as the initial step in the system implementation, which typically takes three to six months. Experts agree that software should be flexible enough to run on a variety of platforms. The most common operating system for inventory management is UNIX, but some packages also run on Windows. Salespeople need to know what inventory is on hand in order to maximize their selling opportunities. Today's software systems can give them real-time access to inventory levels, as well as each customer's sales history and buying habits. "Service-center customers are looking for an immediate response and they want fair pricing," says the vice president of marketing at Prophet 21, Yardley, Pa. |