Posted on Leave a comment

Guide to Effective Raw Material Management

Countless issues can derail raw material management strategies. Warehouse managers need to be prudent to avoid the complex issues common in the industry. The intention of this article is to equip you with strategies to manage your raw material handling and save you the headache of encountering these problems.

Warehouse Shark Inventory Count Dashboard displaying in progress and completed counts. Learn more here.

Inventory Cycle Counts

It’s best practice to conduct either monthly or yearly inventory cycle counts depending on the product inventory value (calculated in relation to gross annual sales). A common approach to deciding on the frequency of cycle counts is using an ABC analysis of your inventory. Conducting efficient cycle counts is the most common area of growth reported by warehouses. Read this page if you’re interested in learning more about Warehouse Shark handles cycle counts.

Trace 

Generally speaking, raw materials requiring trace are prelabelled with relevant trace information including serial number, lot number, and expiry dates. This information is useful but often it isn't bar-coded. You'll need to include this information in your bar-code to properly implement FIFO stock rotation. This is also required for inventory counting and pick confirmation.

How many hours a day do you or your employees spend picking and issuing items? Systematizing these processes will streamline your entire warehouse operation.

Picking and Issuing 

Since we’re on the topic of pick confirmation, let’s talk about picking and issuing. It's imperative to keep your labeling and putaway processes consistent to maintain the accuracy of your inventory numbers. Begin picking using the FIFO approach and ensure that the process is captured in real-time as the materials are consumed.

Issue Returns 

Next, we’ll discuss issue returns. The production process often leaves leftover materials that need to be returned for storage. Implementing issue returns requires using a dimensional component in conjunction with raw material tracking information. An example of this is using linear feet track the raw material returned (i.e. 10 feet of a 30-foot pipe was returned for storage).

Physically separating quarantined materials saves a the headache when dealing with product recalls. 

Quarantine & Holds 

There are many different reasons you might use the “Hold” function to freeze your inventory (for example, product recall). A better way to go about this is to create a permanent location in your warehouse as a quarantine. Quarantine is where you physically separate the materials or products in question. Having received and putaway goods, you should ensure you have the ability to put lot numbers and entire locations on hold as needed. 

Relabeling 

Relabeling concerns customizing the bar-code information for your warehouse needs. When you receive goods, be ready to re-label them according to the part # and trace #. Your WMS should support printing of labels while receiving (this will save you a lot of time!). You can read more about relabeling in this article on 5 Best Practices For Labeling In Your Warehouse. 

Repackage material and create new labels for the smaller packaged quantities. 

Repackaging 

Bulk goods will arrive at your warehouse in several forms, often in gaylords or drums. Warehouses generally don't process the materials using the same quantity as they ordered so repackaging is required. This process includes taking bulk materials and repackaging them into smaller, usable quantities. 

Stock Rotation 

Stock rotation is impossible if you don't use strict labeling conventions. Maintaining FIFO picking and accurate inventory records are also part of this discussion. It's imperative to have an inventory management system capable of identifying the correct choice of reserve stock to complete replenishment of pick faces.  

Equip yourself with the best strategies for raw material management and your warehouse will thank you! Paradigm Electronics In.

Conclusion

Consider this guide a list of ‘low-hanging fruit’ strategies for implementation at your warehouse. If you find yourself overwhelmed with raw material management, don't hesitate to reach out to us at info@portable-intelligence.com.

Guide to Effective Raw Material Management

​Read More
Leave a Reply

Your email address will not be published. Required fields are marked *