Summary: See how Sage’s manufacturing inventory management system helps manufacturers keep their raw material and finished good counts accurate with built-in tools (no add-ons required).
Inventory tools are usually built for distributors, which means they’re meant to handle only finished goods. If a distributor runs into a count error, their stockout will make them put a customer on backorder. But if you’re a manufacturer trying to use a distribution tool to manage both raw materials and finished goods, that same error has double the effect. It can result in a backorder and stop production.
Considering how much higher the stakes are for manufacturers than distributors, I think more inventory management solutions should be available for small to mid-size manufacturers.
And they should all specifically address the places where inventory falls through the cracks in a busy manufacturing plant.
The 6 Places Where Standard Manufacturing Inventory Management Systems Fail (and How Sage 100 Fixes Them)
Here are the errors that manufacturers see all the time. The Sage 100 Inventory Management module (included in Sage 100 Complete for manufacturers) tackles each of these issues directly.
- Manual keying errors
Inaccuracies often start with data entry. A mistyped item number or quantity during receiving, counting, or shipping sets the stage for stockouts (or overstock) later on.
Sage 100’s barcode label printing lets you replace the manual data entry with a simple data scan. This lets anyone on your shop floor capture the numbers and quantities accurately, every time they collect an item or put one away.
- Duplicate item numbers
The same item may have a different number on a customer PO than it does on a vendor invoice. This can lead to duplicate item records or incorrect receipts, depending on how the item was entered.
Sage 100’s alias item numbers allow you to assign multiple numbers to one item, so your records are always correct, and items are easier to find, too.
- Physical count hassles
Let’s be honest: if you’re doing once-a-year counts, your inventory is probably at least slightly off for 51 weeks of the year (and potentially way off for 5 or 6 weeks). But you can’t just shut down operations to update your counts all the time.
Sage 100’s manufacturing inventory management system lets you update Physical Count Worksheets without interrupting your sales process. And with its variance report, you can target follow-up activities for items that are significantly off instead of recounting everything.
- Warehouse transfers
Forgot to enter a warehouse transfer? Now your stock looks like it’s in one place when it’s actually in another.
With Sage, you can maintain separate inventories at any number of locations, and the software’s explicit warehouse transfer steps help you ensure that when you move stock between locations, it’s properly tracked and accounted for.
- Valuation issues
Accuracy goes beyond counts. You also need the right value on the books. But accurate valuation is nearly impossible if you’re relying on spreadsheets or standard accounting tools.
Sage 100 supports standard, average, FIFO, LIFO, and lot/serial costing, and it maintains standard, last, and average costs for each item, no matter which costing method you use.
- Untracked entries
Speaking of issues, how can you identify where an issue originated in your system today? Was it a bad count? A bad receipt? An incorrect shipment? Finding the answer may take hours of work… or you may never find the answer.
Sage 100 provides you with a detailed and unlimited transaction history, as well as a transaction audit trail you can run for specific date ranges. With these numbers available, you can track down issues when you need to.
Bonus #7: Complete Manufacturing Inventory Management Requires Bills of Materials
The six capabilities above can keep your raw materials and finished goods accurate as separate categories, but manufacturers need the two connected because one is always required to create the other. Since distribution-centric inventory management systems don’t track production, a lot of inventory errors begin the moment production consumes raw materials to create a finished good. If you didn’t track everything perfectly up to that stage, your counts may vary wildly.
To make it a true manufacturing inventory management system, Sage 100 Complete for manufacturers includes the Bill of Materials (BOM) module. The BOM module lets manufacturing companies list exactly which raw material components and quantities go into a finished good. These BOMs can then be used to automatically deduct the correct raw materials from inventory the moment a finished good is completed. This can be accomplished through the Bill of Materials module itself, or through the Production Management or Operations Management manufacturing modules.
It’s the missing link that turns your “raw materials are accurate” and “finished goods are accurate” statements into a single, useful “manufacturing inventory is accurate” statement you can count on.
No distribution-centric inventory management system can do that for you.
Talk to the Sage Manufacturing Experts About Closing Your Inventory Gap
