Today’s technological advances have provided many sophisticated tools for assisting companies with inventory management. In 2010, ChemRite’s team set out to incorporate an electronic inventory management system into its daily operation with the goal of tightening inventory control, simplifying inventory process flow and improving warehouse organization. Throughout the year, concentrated effort was placed on designing a customized electronic system which would meet the needs of each of our valued customers and be compatible with ChemRite’s main operating software. The end result is a unique inventory control system specifically catered to use within ChemRite’s manufacturing environment.
All inventory movement at ChemRite is now tracked through the use of wireless barcode scan guns. An extensive amount of preparation took place before the electronic system was put into use. Wireless access points were installed throughout each of ChemRite’s buildings in order to permit the scan guns to communicate through an internal network. Considerable programming customizations were made to ChemRite’s main operating software, ChemPax VB, to allow for new inventory control functions. Bar coded location signs and inventory material placards were placed throughout ChemRite’s facilities. In addition, ChemRite’s team spent a significant amount of time testing all of the new electronic components to ensure that each piece worked properly and was accurate.
The benefit of months of intense preparation was seen when use of the wireless barcode scanners became “live”. Due to the team’s diligent groundwork, there was a smooth transition into an automated inventory control environment. From the moment material is received into ChemRite’s warehouse, through the production process and final shipment, it is electronically controlled and tracked. All inventory is initially received into the quality control quarantine area. Once material has passed quality inspection, it is placed into an assigned bin location. Each time the material is moved, its bin location is tracked through electronic bar code scanning. This process has given ChemRite’s team the ability to locate the exact position of a lot controlled quantity of material at any given time, as well as view a detailed history of inventory movement by location.
When it is time for a material to be consumed in a formula batch or finished good production, an electronic “pick slip” is created. This pick slip instructs material handlers which items should be picked from which locations, specifying exact quantities and lot numbers in FIFO (first in, first out) order. The result is that the right items and right quantities are consistently picked. As they are moved, they are linked to a specific batch number. This process becomes an invaluable tool in the event of a component recall because it gives ChemRite the ability to track the exact formula batch and finished good production the component was used in, reducing the need for unnecessary product rework or rejection.
Once production is complete, unused material is returned to the appropriate warehouse. Any material quantity discrepancies which have occurred during the production process are reconciled during an end of run cycle count. ChemRite strives to maintain an inventory gain/loss factor of 2%. If any inventory discrepancy is greater then the 2% gain/loss factor, further research is done to determine the cause. Internal inventory audits are also performed as a further assurance of the system’s accuracy.
ChemRite’s team has seen a marked improvement in many inventory control functions since the installation of the new electronic inventory control system. The ability to access “real time” inventory information has proven to be invaluable. We have also seen an increased level of inventory accuracy and a decreased level in gain/loss factors. Electronic location control and the elimination of a paper-bound inventory flow has supplied our warehouse team with the tools for increased organization and greatly assists in time management. ChemRite’s warehouse manager, Greg Wolken, says, “The new system cuts the time of picking inventory in half. Our material handlers know the exact locations of every item.”
Of course, ChemRite’s primary motivation for this facility improvement was driven by an emphasis on increased customer service. How exactly does ChemRite’s improved inventory control system benefit its valued customers? This topic will be discussed in an upcoming issue of the CRCP E-Newsletter.