How To Track Raw Materials In Your Warehouse
What is Raw Materials
Raw materials are the input goods or inventory that a company needs to manufacture its product. Raw materials include steel, oil, corn, grain, forest resources, plastic, natural gas, coal, minerals and etc. Raw materials can be direct raw materials, which are directly used in the manufacturing process, such as wood for a table.
Why track raw materials in the warehouse?
Tracking of raw materials help to minimize waste and increase production yield to ensure warehouse is productive when it comes to ordering and making sure no overstocking of products that are not moving.
Imagine you have many racks of ingredients or raw materials in your warehouse, and you have no idea where is your product, what does it do, why is it moving from the warehouse, whether inventory levels are low and requires re-order, then you need to understand the entire flow to properly track raw materials in the warehouse.
How to track raw materials in the warehouse?
1. Categorize what raw materials you need
Managing any type of inventory is challenging if you aren’t sure what your business needs. Before you start tracking inventory, you’ll need to figure out what raw materials you actually need. Take the time to craft a list of every raw material, both direct and indirect, your company uses to produce finished goods. Also, include items you need only occasionally, that is especially when you need to special order those products to fulfill requests.
To make this task easier, you can review existing inventory lists, count what’s on your racks and shelves, discuss with your employees what materials they’re using day in and day out.
2. Develop an inventory system
Constantly update inventory every time a raw material is received or used up.
This process may seem daunting, but tracking inventory this way doesn’t have to take all day. With the right modern inventory management tools, your team can quickly scan item received and item picked using barcodes and QR codes. Inventory solutions like Axacute allow your team to use a mobile scanner, and you can also generate custom barcodes labels for unlabeled inventory.
3. Understand inventory control
Next, you should reconsider your inventory control strategy.
Inventory control is all about finding that perfect balance between keeping your inventory costs down and ordering enough inventory to swiftly respond to your customers’ requests. Ordering too much, will end up with overstocking of raw materials. On the other hand, if you order too little, there will be understock and can cause disruption to the workflow, which causes customer disatisfaction and may affect your business’ reputation.
And properly tracking raw materials is a huge component of inventory control. After all, one of the most compelling reasons to track what you’ve got and how much of it you use is to save cost and order smarter while still putting your company in a position to thrive.
4. Select the right inventory system
If your team can’t or won’t use your inventory system, then there’s no point in trying to implement it. From the onset, search for an inventory tracking solution that’s in your price range, customizable enough to meet your needs, and user-friendly enough that all your employees can use it.
Think through the equipment and technology you’ll need, too. Some inventory management software, for example, requires external barcode and QR code scanners. Others allow you to use a phone or tablet to perform the same actions. The same goes for keeping inventory on a spreadsheet: will all your employees on the floor have access to a computer, or would some kind of inventory system that works on a phone or tablet be a wiser choice?
But of course, spreadsheet may have a downside to consider as it is prone to human errors. That’s one of the thing to take note of!
5. Cycle count from time to time
One of the major selling points of adopting an inventory tracking system is that you won’t need to constantly count all the raw materials on your storage shelves. But we still recommend a physical inventory count—or at least a cycle count—from time to time.
An occasional inventory count will allow you to:
- Ensure all inventory-related standard operating procedures are being followed
- Identify inventory loss, then address the problem swiftly
- Reconsider relationships with suppliers should you notice shortages or declining quality
Many manufacturers also conduct an end-of-year inventory count. This audit allows them to unlock the above benefits while also preparing them for tax season and improving their inventory records and demand forecasting numbers.
Axacute, includes Cycle Count features
Axacute is a cloud-based solution designed for small and medium sized manufacturing companies to obtain greater visibility into their warehouse and shop floor operations; so that they can get better insights to true operation costs, improve cycle times and on-time deliveries.
In fact, Axacute inventory module includes features such as Cycle Count
Watch our Axacute’s WAREHOUSE video that teaches how to update the quantity counted into the system using the Inventory Count function. The counted quantity submitted via mobile will be updated in the web inventory count sheet.
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