If your business is in the manufacturing industry, you already know how challenging inventory management can be.
After all, you’re not just tracking one kind of inventory, but four types of inventory: raw materials, work in process, finished goods, and maintenance and overhaul items. That’s why so many manufacturers implement inventory management systems—there’s simply no better way to keep an eye on all that inventory.
This article will touch on five key steps to managing manufacturing inventory, then provide you with a manufacturing inventory template that’s perfect for getting started.
Five steps to managing manufacturing inventory
If managing your manufacturing inventory feels downright impossible, these five simple steps can help make your inventory management processes less stressful and more efficient.
1. Organize all your inventory
This first step is critical to setting up inventory control in your manufacturing business. After all, you can’t truly begin to inventory what you have on hand until all of your physical stock is logically organized and in the right location.
Don’t be afraid to rethink how, where, and why you store certain items. In fact, the smartest inventory storage offers easy, frictionless access to the inventory with the highest turnover rate. In other words, place your most popular items where they’ll be easy to reach—and use the least convenient storage areas for items needed relatively infrequently.
2. Document your inventory in a list
Once you’ve organized inventory to streamline both daily manufacturing operations and inventory management, you’re ready for the next step: making an inventory list. This list should be a detail-rich, comprehensive database of every last item your manufacturing company keeps on hand.
You can create this list in three different ways:
- Via inventory management software (or an inventory app)
- Using an inventory spreadsheet—we’ve included a template later in this article
- On a sheet of paper (though this method is not recommended)
It’s incredibly helpful for manufacturers to include photos of each piece of inventory to accompany their inventory list. Inventory apps like Sortly make it easy to add high-resolution photos of inventory to each item’s profile. You can add pictures along with other item details, including item name, SKU, value, color, location, condition, and more. This is nearly impossible if you’re using a spreadsheet or a sheet of paper to track inventory.
Many manufacturers also find it useful to add barcodes and QR code labels to their inventory when creating their inventory list. Doing so can speed up tedious inventory processes like checking items in and out and updating inventory counts. You can easily set up a barcode inventory system in Sortly when you create your inventory list—all you have to do is sync the existing barcode or QR code with an item. If there’s no barcode or QR code on the item, you can use Sortly to generate and print a customized barcode or QR code for you.
If you’re not ready to make a digital inventory list using manufacturing inventory software, we recommend starting with an inventory spreadsheet. You can always upload the data in bulk if and when you’re ready to use the software.
3. Set important alerts and reminders
Your inventory list provides key details on every item your company has on hand, from raw materials to finished goods. But to truly optimize inventory control, you’ll need to know when inventory is running low or if certain items are approaching warranty end or expiration.
If you’re using an inventory app like Sortly, you can schedule these reminders automatically based on minimum item quantity. Simply set a minimum inventory level for the item, and get notified by email or in-app notification when it’s time to reorder. You can also set up date-based alerts, which are used as reminders for maintenance and expiration dates.
If you manage inventory manually using a document or a spreadsheet, you’ll need to create a calendar that reminds you when to order more inventory and service equipment. Remember to factor in inventory turnover rate and your suppliers’ lead times to properly schedule inventory counting and ordering dates. You’ll also want to create a calendar to track important dates, like scheduled maintenance.
4. Take inventory frequently
Now that your inventory is organized and accounted for on a comprehensive inventory list, your next job is to keep that inventory list as accurate as possible. There are two ways to do this: keeping physical or perpetual inventory.
With physical inventory, your team will need to physically count inventory, update inventory records, and then place orders accordingly. With perpetual inventory, your team will update your inventory counts whenever an item is used, providing you with always-accurate inventory counts.
In general, most manufacturers that track inventory on paper or via spreadsheet practice physical inventory. Manufacturers that rely on inventory apps and software tend to practice perpetual inventory, as it relieves them of having to update manual inventory lists every time an item is used. Inventory software that allows you to have a full visual inventory at all times, and offers automation features to speed up inventory counts, makes this much less time-consuming.
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5. Perform an annual audit
Finally, most manufacturers perform end-of-year inventory counts on top of regularly tracking inventory levels. These annual audits allow businesses to identify inventory shrinkage, forecast demand, thoroughly update their balance sheet, calculate depreciation of high-value assets like machinery and equipment, and determine what inventory is at risk of expiring, falling out of warranty, or obsolescence.
This year-end count is also a great time to reorganize your inventory, just as you did in step one.
Manufacturing inventory template
Searching for the right excel manufacturing inventory template? We’ve created the perfect template for inventory management for manufacturing companies. This template is pre-populated with some of the most popular items stocked by manufacturers, but it’s yours to customize and refine.
This spreadsheet may be a good starting point for those documenting their inventory for the first time. Furthermore, it’s quick and easy to upload data from this spreadsheet to software like Sortly if you decide to make the switch to inventory software.
Sortly is a top-rated inventory management software solution trusted by manufacturers all over the country. With powerful automation features and an end-to-end visual inventory dashboard, our inventory app is perfect for manufacturers that stock tons of inventory—even across multiple locations, factories, or warehouses.
From barcode and QR code scanning to low stock alerts, there are so many ways Sortly can streamline and supercharge your team’s inventory management system.
Curious how Sortly could help your company? Start a free, two-week trial of Sortly today.