Inflation has significantly impacted manufacturing costs for businesses. The higher prices of raw materials and components have forced manufacturers to think of new strategies for reducing their costs and increasing their profits. That is why thousands of manufacturers have turned to powerful inventory management software like CIN7 Core Systems to assist them in this effort.
CIN7 is a cloud-based inventory management tool that can help manufacturing businesses manage their inventory of raw materials and components they use to assemble their products. It is a multi-module inventory management program that can improve inventory management and operational efficiency to reduce costs for any manufacturing business regardless of its industry.
Below are the top 4 cost reduction strategies that manufacturers can use with CIN7 Core inventory management software to improve their inventory management and operational efficiency.
1) Track Inventory Levels Accurately
Manufacturers need enough raw materials and components available in their inventory to manufacture the necessary number of products. One of the worst things that can happen to a manufacturer is not having enough materials available to create their products. Not only will this cause them to lose money, but it can also cause them to lose commercial clients.
CIN7 inventory management software can help manufacturers track the quantities of raw materials and components available in their inventory in real-time to ensure they never run out. If they run low on one particular type of raw material, the software will automatically reorder more from their supplier before they run out. That way, they always have a ready supply of raw materials to manufacture their products continuously and maintain productivity.
In addition, manufacturers can also use CIN7 inventory management software to see if they have too many raw materials and components. After all, it would be a waste of money if manufacturers purchased more raw materials than they needed. So, if manufacturers can verify the current quantities of raw materials in their inventory, they will not end up buying more of them.
Manufacturers can submit purchase orders for more raw materials through the CIN7 software. Each purchase order shows real-time inventory amounts of each raw material and component featured in it. If one item has high stock levels, you can quickly delete that item from the purchase order to avoid purchasing more of it. But if one item has low stock levels, you can easily increase the quantity of the order.
As a result, you can reduce overstocking your inventory and avoid paying more for items that you don’t need.
2) Use Automation to Reduce Labour Costs
CIN7 software automates many of the inventory management tasks that would otherwise require manual input to perform, such as counting and recording stock numbers, processing orders, and generating inventory stock reports. By automating these tasks, it can significantly reduce labour costs for a manufacturing company.
For instance, you could reduce your workforce to save money on labour costs after integrating CIN7 Core Systems into your manufacturing operations. It will also reduce the risk of human error that often occurs with manual inventory counts. Minimising mistakes is one more way to reduce labour costs since inventory counting errors have severely adverse effects on production when they are discovered.
Manufacturers can utilise the automation power of CIN7 software to keep track of inventory items in real-time, no matter where they are in the supply chain. So, if you order more stock items to refill your inventory, you can track where those items are currently located in the supply chain. That will help you plan for the arrival of the items so that you can have your production team on standby.
3) Avoid Higher Storage Expenses
As a manufacturer, you understand the high costs of storing inventory for extended periods. The initial storage expenses include renting space, security, utilities, labour, and all the expenses for maintaining the quality condition of the stock items themselves. So, for instance, if you have perishable food items stored in inventory, you’ll have additional costs to freeze and preserve them until they are sold to consumers.
CIN7 inventory management software can help you reduce your storage expenses by reducing overstocking of your inventory. After all, the fewer items you need to store, the lower your storage expenses become. Plus, you do not have to worry about products spoiling, deteriorating, or becoming outdated and irrelevant to consumers. Maintaining new and fresh items in your inventory will help increase sales and reduce financial loss from having unsellable products.
CIN7 lets you assign costs to every item in your inventory. That can help you calculate their storage value and whether it is worth the expense to keep them in storage for what you could sell them for to consumers.
4) Better Inventory Organisation and Faster Order Fulfilment
Manufacturing facilities require fast and efficient operations to sustain high productivity. Perhaps one of the best features of the CIN7 inventory management software is the ability to track all items in your inventory in real-time. Instead of spending hours searching for stock items in your warehouse, you can use CIN7 to organise your warehouse better so that you know exactly where to find every item. Then you won’t have to spend much time looking for items again because you will know where they are at all times.
Another financial benefit of CIN7-assisted inventory organisation is that you don’t lose items due to misplacement. Since the CIN7 software tracks all the items, you will always know where your stock items are transported and placed at all times. Because of this, you will never lose money from misplacing or losing items since you can continuously track their locations in real-time.
Get Professional Assistance
Would you like professional assistance in implementing cost reduction strategies using CIN7 Core to improve the operational efficiency and inventory management of your manufacturing business? Bluehub has a team of experienced inventory management consultants who can help you integrate the CIN7 Core software into your manufacturing operations to reduce costs and increase productivity.
