Supply Chain Logistics Common Issues
Not having accurate control of the various “landed costs” was a fact of life this distributor learned to live with saying: “it’s the cost of doing business.” In previous years in a less competitive market with a higher gross margin of profit and a stronger dollar, nobody paid attention to the “landed cost” accuracy, assuming it would “averaged itself out.”
- Buying based on “guesswork”:
Not having accurate computer information will result in purchasing the wrong products or quantities and the unsold inventory will “collect dust” on the shelves in the warehouse.
- Purchase order verifications:
When inventory is received at the warehouse, not being able to scan and verify it against the purchase order will result in excessive paper work, higher labor cost, and possibly missing the early payment discount date offered by the vendor.
- Misplaced inventory:
When consolidating items on shelves, inventory often gets misplaced resulting in unnecessary replenishments. At physical inventory time, when found, this “lost” inventory often becomes excess inventory that might not be sold.
- Wrong shipments:
When incorrect products or quantities are shipped it creates the “domino effect” of business disruptions. Returned products carry double freight bills and the invoices will not be paid until credits and adjustments are issued. If the shipped inventory is replenished, often it will become excess inventory.
- Production coming to a grinding halt:
Not having accurate inventory control will result in parts’ shortages that can bring the assembly line to a grinding halt, resulting in business disruptions.
- Profit or loss when using the Web?
The Web can be a key to sales’ success or business disruptions. Using the Web can increase sales drastically, or result in disruption of the back office business flow. Having outdated software will result in incorrect shipments, shortage of saleable items or excess inventory.
SMC Data Systems, your trusted advisor for supply chain management software solutions, provides Food Manufacturing Software, Inventory Management Software and more. The premier integrator of VAI’s S2K Enterprise, SMC Data Systems are experts in enterprise application integration for mid to large size companies.