Inventory management forms the heart of all the manufacturing and allied activities – procuring the raw material, converting it into the final offering by the firm, determining optimum stock levels, and reorder quantities. The optimum level of inventory, at a given point, avoids under- and over-investment of funds and resources. An efficient inventory management system is crucial to saving firms from stock-shocks and losing customers.

Role of RPA in Inventory Management

Inventory management includes a series of repetitive tasks across various departments with a mostly transactional nature. Automating, with better coordination among the various departments, reduces redundancy, duplication of work and saves time and effort.

With automation of inventory management, oversights in determining optimum reorder levels, quantities, and delays are eliminated. An automatic system continuously monitors the stock levels, provides day-to-day data on usage rates of various stock items, notifies, and orders when the levels go below the safety-mark.

It analyzes the average daily consumption of raw-materials and adjusts the reorder levels according to the market demand. It determines an optimum stock level by regularly calculating turnover ratios and time period.

Increased levels of transparency help the organization to rectify the stock levels at any time and evaluate present requirements. It is a stable system that gets updated continuously which makes it simpler and easier for the organizations to absorb market shocks and adapt to a dynamic external working environment.

How Inventory Automation benefits SMEs?

For SMEs, with limited free funds, an over-investment in inventory results in a huge opportunity cost as well as carrying and holding costs of the excessive stock. An under-investment, on the other hand, can distort the entire manufacturing process thereby not catching up with the market demand and ultimately losing its customers.

The SMEs, in their growth phase, manually maintaining and monitoring an increasing data on sales, finished goods, WIPs, raw materials, parts, and components, etc. is not an easy task, it more than often results in inaccuracies and mismanagement.

Integrating the inventory management automation system with the firm’s EPR eliminates the need for manual recording and stock-taking by developing a separate database for each of the stock and produce and updating the change in their levels as and when it happens.

How does it work?

It develops and maintains databases for different departments. The automation system keeps accessing the databases of different departments – sales, purchase, production- modifying the re-stocking levels according to the needs of the departments.

Once the stock levels are reduced below the threshold, the automation system kicks in the procurement process. It generates requirement details, sends it to the concerned department for approval, places the order for purchase, collects the invoice from the vendor, and updates the payables account.

The automation system, while ordering the stock, goes through and analyzes all the options available to the firm and identifies the lowest price at which the inventories can be re-ordered. It keeps on evaluating the various lag-periods to determine the time duration that is most cost-effective for re-ordering.

Market research shows firms that have adopted the automation system have effectively reduced their inventory processing time. The time taken for completion of each operating cycle is down by 20% and the entire inventory processing time has been reduced by 70-72%. It also reports, these firms have nearly zeroed the losses incurred due to delays and discrepancies in reorders. The firms with automation have reported zero line stoppages.

An automated inventory management system makes the firm more efficient and organized. Here is how it does it.

Eliminating Mundane Manual tasks:

The process of inventory involves many mundane manual tasks including stock-taking, making purchase orders, updating data on raw materials, finished goods, spare parts, etc., which are prone to human errors The automated system takes over these tasks, executes without any inaccuracies, and on time, and releases much of the human resource blocked in the process.

Efficient coordination:

The process requires a lot of external and internal communication and coordination. The system is integrated with the operating system of the firm, it coordinates the demand and requirement for various inventories at various production and sales levels. Automation, also, communicates with the vendor, supplier, and end customers, resolve their queries instantaneously, and collects feedback.

Cost-effectiveness:

Since automation is able to determine an exact stock level required to keep the business functional, it reduces over-stocking thereby cutting down on the warehousing and holding or carrying costs of the inventories. It also avoids under-stocking and hence, zero or negligible costs are incurred in terms of customer or goodwill loss.

Selecting the right seller:

An automation system thoroughly analyzes the various alternatives available to the firm and picks the seller that asks for the least price. It lists the vendors, gets quotations, matches the offering to the requirements of the firm, checks for hidden costs, if any, and selects the right seller to place the order.

Productivity is one of the most trending topics these days. People who work from home continually are dealing with change in workplace settings as well as a lot of anxiety related to the ongoing COVID-19 pandemic. There are couple of things an organization can do to ensure employees remain engaged and productive in this new context.

Transparency

Considering the amount of confusion and rising fear due to corona virus, workers will be on-edge more than normal. From anxiety to apathy, a wide variety of emotions are on display. Let them know it is okay. Explain the company plan, let them have a mental break from everything if they need to, be open about the current state of the company and what the coming months will look like. When you are aware of what may happen, you can plan for it. As a leader, a voice of reason and composure would better reassure the team. The more empathy, gratitude, and understanding, you can show the more opportunity you will have to calm you team down and the better they can do their job.

Set and work towards practical goals

The lack of control over the ongoing situation brings stress to your employees who may eventually fall in a state of learned helplessness, meaning the belief that, they can do nothing because everything is out of their hands. Operating with clear goals not only brings productivity, can be a helpful distraction from nervous thinking and builds a sense of self-efficacy — the idea you can achieve your goals.

Touchbase with your team daily

Schedule formal, daily virtual meetings with your team to check-in and check-out every day and make sure everyone is aligned and on target.  On a less formal basis, one can send messages to the team member asking about their well being and if there is any place where help is required. These touch points make sure everyone is connected and ready to function.

Promote self-care

Encourage team members to take time out to relax, exercise, and generally indulge in something that calms and rejuvenates their heart, mind, body, and spirit. Such exercises keep everyone balanced.

Augment your workforce

During this transition from workplaces to home offices, there will be a drop in efficiency. With so much going on around us, keeping up with boring, mundane activities is harder, people will make mistakes and get distracted easily.

Robotic Process Automation (RPA) tools can mimic the interactions of humans with computer to perform daily office tasks like extracting information from invoices or contracts and entering data into spreadsheets or CRM system such as Salesforce, freeing employees to perform more exciting cognitive tasks. Productivity goes up and costs come down.

Want to learn more about exciting opportunities RPA can bring? Let’s get in touch!