Having minimum stock levels of raw materials in warehouses is important for SME manufacturers. This helps to make production plans according to sales orders and execute them without disruptions. With stock level optimization, you can avoid stockouts and overstocking, use your storage units for maximum output, and reduce holding costs. It also helps you buy your raw materials from the right suppliers on time and improves your supply chain efficiency. TranZact is a tool specially designed for SME manufacturing businesses in India. It offers advanced inventory management features and allows you to optimize minimum stock levels of each inventory item according to your requirements.
In this blog post, we will learn how TranZact can help you with inventory optimization to improve production and reduce operational costs.
Understanding Minimum Stock Levels
Minimum stock levels are the lowest quantity of a product or material that a company should have in stock to avoid running out. This also helps you avoid overstocking products that have less usage in production and reduce inventory holding costs. You can implement inventory management software in your business to increase visibility over raw materials and set minimum stock levels to reorder on time. It also helps you reduce manual errors and save time in inventory adjustments.
Read Minimum Stock Level: Definition and Calculation for a better understanding.
The Role Of Safety Stock Management
Safety stock management helps you identify high-value products and keep their extra quantities to avoid stockouts and improve order fulfillment. It helps you manage the situation if the delivery of new purchase orders is delayed due to some issues in the supply chain. It can slightly increase your inventory holding costs but helps you avoid disruptions in production. It helps you improve customer satisfaction and your business profitability. Read Effective Inventory Management: Strategies for Maintaining Optimal Minimum Stock Levels
Optimizing Minimum Stock Levels With TranZact
TranZact is developed with easy-to-use features that help you improve inventory accuracy and maintain minimum stock levels at your manufacturing warehouse. Let’s learn more about optimizing minimum stock levels and how TranZact can help you with them.
1. Stock Level Optimization
Stock level optimization is the process of storing the right products in the right quantities to control inventory costs and improve production processes and order management. You need to analyze inventory lead times and sales orders to maintain optimal stock levels based on your specific requirements. It helps you improve production planning and workflow to increase your business efficiency.
2. Inventory Cost Reduction
You can use different techniques to optimize your inventory and reduce costs. Here are some of the best strategies to help you with inventory cost reduction.
- Just-In-Time: It helps you reduce holding costs by ordering raw materials in the right quantities after materials requirements planning for your production targets.
- ECQ: Economic order quantity is the strategy to order raw materials in the right quantities to avoid overstocking, fulfil customer demands, and control inventory costs.
- ABC Analysis: It helps you divide inventory items into three categories (A, B, and C) according to their values. It helps you focus on high-value products to increase your business profits.
- SOS Analysis: Seasonal, Off-Seasonal (SOS) analysis helps you identify products with high demand rates during specific periods. To reduce inventory costs, you can increase the minimum stock levels for seasonal products and decrease them for off-seasonal products.
How TranZact Helps?
TranZact automates your inventory management processes and allows you to optimize stock levels based on your specific requirements. Here are some unique features of TranZact that improve inventory accuracy.
- It offers automated inventory management features to track stock levels of all types of raw materials in real time, in one place.
- Its multi-location inventory management software helps you track raw materials available in multiple warehouses and manage their minimum stock levels.
- You can set minimum and maximum limits for stocks to maintain optimal inventory levels.
- It offers EasyCom integration that helps to manage stock better by automating shipping and tracking, helping with faster deliveries and reducing errors.
- It offers GST-compliant document generation and management to help you fulfil the government’s regulations and avoid legal issues.
- Its Resource & Intelligence module provides purchase, production, and sales reports to improve your demand forecasting.
Lean Inventory Management With TranZact
Lean inventory management is a strategy to reduce waste in production to increase operational efficiency. It aims to keep the minimum stock levels of all inventory items so that you can fulfil orders on time and reduce holding costs. TranZact allows you to use lean practices for inventory management.
- It allows you to set maximum stock limits for each inventory item so that you can avoid overstocking.
- It helps you speed up the movement of raw materials throughout the manufacturing cycle and improve your inventory turnover rates.
- It helps you maintain the minimum stock level of raw materials to reduce holding costs and improve production processes and demand management.
Enhancing Supply Chain Efficiency
TranZact inventory control software allows you to improve relationships with multiple suppliers from different locations and get the required raw materials on time with quality checks. You can track current stock levels and the status of purchase orders to improve your supply chain activities. It helps you organize supply chain activities in the best order to maintain optimal inventory levels and increase efficiency.
Leveraging TranZact Inventory Management Software For Manufacturing
TranZact is specially designed for manufacturing industries to manage all processes with ease. Its inventory management software for manufacturing helps you reduce errors, speed up the tasks, and fulfil your specific requirements, along with the following benefits.
- Maintain accurate inventory levels based on your sales orders.
- Access previous data related to procurement, production, and sales.
- Predict future demands and optimize your stock levels accordingly.
- Create and analyze documents like purchase and sales invoices.
- Improve cost analysis and help invest money wisely.
- Track stock levels in real-time to make informed purchasing decisions.
- Set reorder points for each inventory item to maintain minimum stock levels.
- Set WhatsApp and email alerts within TranZact’s inventory management system to improve your business productivity.
Improve Your Stock Level And Reduce Cost With TranZact
TranZact offers easy-to-use features to track your inventory items and reorder on time to maintain the minimum stock levels. It helps you avoid stockouts and overstocking to avoid disruptions in production lines and reduce holding costs. It allows you to use different techniques like just-in-time, FIFO, and LIFO based on the nature of the products you deal in to improve inventory accuracy. You can track and manage your multiple warehouses through a centralized dashboard, update your inventory in real-time, and maintain transparency with suppliers and teams.
Implement TranZact in your manufacturing business in just 14 days!
FAQs
1. What are minimum stock levels, and why are they important for my business?
Minimum stock levels are the lowest quantities of raw materials that you keep in warehouses to avoid stockouts and achieve production targets without disruptions. They are important for your business to improve order management.
2. How does TranZact help in optimizing minimum stock levels?
TranZact helps optimize minimum stock levels by categorizing inventory items, setting minimum stock limits for each item, and sending alerts when reaching those levels to reorder on time.
3. Can TranZact reduce inventory holding costs and overall operational costs?
Yes, TranZact helps you avoid overstocking by using techniques like FIFO and setting min/max stock limits to reduce inventory holding costs. It also helps you order raw materials from the best suppliers, avoid downtime, and improve production processes to reduce overall operational costs.
4. What is safety stock, and how does TranZact assist in managing it effectively?
Safety stock is the extra quantities of raw materials in warehouses to avoid disruptions in production in emergencies. TranZact helps you categorize raw materials based on their value to keep their safety stock and fulfil orders on time.
5. How does TranZact support lean inventory management?
TranZact supports lean inventory management by allowing you to keep minimum stock levels of each product and reduce waste in processes.
6. What are the benefits of using inventory management software like TranZact in manufacturing?
The benefits of using inventory management software like TranZact in manufacturing are real-time updates, unique item IDs, timely procurement, etter supplier evaluation, setting mix/max levels and more.
