Material Handling

The Problems with Inventory Inaccuracy

This next post in our series on simple Smart Storage benefits touches on common causes of inventory inaccuracies and how they can be eliminated.

One thing we hear from manufacturers around the world is that they don't feel like they can trust the inventory in their ERP/MRP systems. This lack of trust can mean different things, like they aren't sure what is in their stockroom, they don't know what is on the production line, or they aren't confident in their overall inventory numbers across the factory.

When it comes to inventory counts, it gets even trickier when you need to separate inventory for different customers, account for different manufacturer part numbers, determine which lot codes are in on hand. Most manufacturers we talk to think that their issues are worse than anyone else's. But the truth is that most manufacturers are dealing with the exact same kinds of problems, because most manufacturers are storing their parts on the same racks and in the same bins.

The same old systems give the same old problems

In a traditional rack-and-bin system, anyone can remove a reel or package from any location at any time without the ERP being aware. Usually this happens with good intentions; maybe the operator intends to transact that reel but ends up sidetracked for some reason. Regardless, whenever a reel isn't transacted correctly out of storage you have an instant mismatch in what your ERP thinks is available versus what is actually located within the stockroom.

Even when everything goes perfectly, most ERP/MRP systems are simply managing buckets of quantities rather than tracking actual packages. Take a simple example of issuing a 5,000 piece reel to a work order that requires 1,000 pieces: a typical ERP system will record that 1,000 pieces are allocated to the work order, but it will leave the excess 4,000 pieces on that reel in the 'stockroom' bucket. Though the overall quantity may be correct the locations are wrong, and if that excess quantity is needed for another job it can be difficult - and time consuming - to track it down.

An often overlooked source of inaccuracy is having excess open packages. Everybody always likes to pick a full package; they know the quantity on it, it's easier to load into the feeders, and they can pick the job in the fewest number of packages. But, unless those full packages are getting consumed on the floor you are sending partial packages back to the stockroom after production. Unless you accurately count each partial reel, they will all carry with them some margin of error which can add up quickly when you don't prioritize the consumption of partials.

This is just a small sample of the ways that inventory can become inaccurate, and doesn't even touch on all the ways that human errors can - and do - creep into the system.

Smart Storage solves your accuracy issues

The main problems with the old system boil down to using generic racks and bins with software that only tracks buckets of quantities. The solution, then, is pretty straightforward: a system that is made for your material that tracks individual packages from receiving to finished goods.

Imagine a storage system that:

  • Lights up each individual reel that is required for a job
  • Automatically manages FIFO and AVL without any operator decisions
  • Instantly transacts individual reels to each work order
  • Sends those transactions directly to your ERP/MRP/MES systems
  • Tracks and manages locations and excess quantities on each reel in WIP
  • Stores each individual reel in a unique location on a mobile platform as it moves to production
  • Integrates with SMT equipment/software to provide the right reel for the right feeder
  • Receives real-time quantity from SMT machines and X-ray counters after production
  • Automatically transacts parts back into storage, informing ERP of returning quantities and any scrap

This type of system gives full visibility of where your parts are at any given moment, and eliminates all the typical ways that inaccuracies can find their way into your inventory. This is exactly why we designed the InoAuto Storage System to provide each of these benefits, and more. Designed by and for electronics manufacturers, our systems are working around the globe and in every operation imaginable - from the highest mix to the highest volume, and everything in between. Get in touch today to learn more, and to get your own personalized demo of our equipment and software!

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