3 ways to improve inventory through software
By Russ Davidson
March 11, 2019 | 5:00 pm CDT

There are plenty of tips available if your woodworking business is in the market for software. What is out there? What are the costs? What sort of manufacturing options are available?

The most important question you’ll need to ask before purchasing a system is, “What processes is this going to improve for me?” You’ll need to picture real-world scenarios where a specific feature will come in handy for you to utilize. For example, if you’re having difficulty re-ordering your goods on time, perhaps look into a more advanced purchase order system. If your inventory levels are not optimal (perhaps you’re not turning over raw materials fast enough), look into an inventory management system.

Whatever system you decide on, you’ll want to determine your ROI from implementing the solution, which a good software salesman should be able to help you determine. When you calculate your ROI for woodworking machinery, you should compare the cost to what an hourly employee would cost in your employee. You could do the same sort of calculation for a software solution.

The above examples work great for companies looking to automate manual processes they may have. But what if you need to combine all of the above: inventory, purchasing, production, etc.?

Improving inventory management
Material handling devices have been leading the way in recent trends. They provide “simple storage and retrieval systems to intelligent systems that significantly improve inventory control and production management in coordination with other machines in the process.” These devices work strongly with material resource planning (MRP) software.

If you’re using MRP software, it’s likely to take greater control over your woodworking manufacturing process as time goes on. And as it was when it first became prevalent in the 1970s, MRP is still the heart of enterprise resource planning (ERP) systems. As we’ve expanded into the age where ERP systems are dominating the business software shopping lists, it’s important to remember the important role MRP still plays and how it has expanded alongside ERP.

MRP software lets you ensure materials are available for production and products for delivery, optimize inventory levels to reduce inventory costs, and plan purchasing and manufacturing activities to minimize waste.

MRP will still continue to determine what assemblies must be built and what materials must be purchased, and when. The goal will be to meet customer deadlines by building the completed products on time. According to Toolbox for IT, MRP software allows companies to achieve this by providing a company with better resilience, increased data sharing, smarter analysis, self-reporting inventory, and easier implementation than ever before. But how does it provide these benefits to your business? Through critical functionalities within the MRP itself.

Some of the most common MRP functionalities include things like shop floor control and equipment maintenance scheduling. Software Connect recently conducted a survey of companies shopping for MRP software and determined what the most requested functionalities were (see above chart). The top three MRP software features that buyers can’t live without are:

Master production scheduling
One of the most requested features was master production scheduling. You could manufacture products whenever you feel like it, but you wouldn’t be too productive without strict scheduling. A master production schedule, sometimes referred to as MPS, will allow you to ensure you have the resources, staff, and inventory needed to complete a production job.

Effectively coordinating your resources means the difference between efficiency and inefficiency in the manufacturing world.

Purchase planning
Once a master production schedule has been determined, you can move on to planning your purchase, which is going to allow manufacturers to accurately estimate the number of components and raw materials they must purchase to complete manufacturing projects.

What benefits does purchase planning provide?

Poor planning can leave machines dormant at some times and stacking up a line of work at others. MRP systems are purpose-built to alleviate these issues. Proper material planning combined with machine scheduling go hand in hand. MRP systems manage the inevitable complexity that results from bringing together the overall manufacturing resource scheduling.

Demand forecasting
Simply put, forecasting demand to maintain proper inventory levels. Inventory in manufacturing will include both raw materials, or the components needed to build products, as well as finished products.

You may have a new order come in. MRP will allow the manufacturer to check all available inventory resources to reserve items to carry out the task (the manufacturing job).

Successful material requirements planning output require accurate inventory data, bill of materials detail and master production schedules. As in many systems, inaccurate subsystems leads to inaccurate ultimate results. The three features mentioned all impact the concept of visibility in the manufacturing process, so it’s important to ensure these are features included with any MRP system you’re implementing into your business.

Author Bio: Russ Davidson is a Digital Marketing Specialist at Software Connect, which provides free MRP software recommendations. Based in Milwaukee, Wisconsin, Software Connect has helped thousands of companies find the best solution for their needs by understanding software requirements and pointing them in the right direction. For information call 800-827-1151 or visit softwareconnect.com.

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