Month: March 2023

Despite the surge of online stores and e-commerce offerings, a majority of retail shopping still takes place in brick and mortar stores. Fortunately, this is not an either/or situation, as your customers will choose the buying option that suits their needs at that moment.

So what stops some physical retailers from putting their products online? Inventory, specifically managing the inventory between the physical location and the ecommerce store. Here’s how you can manage both, save time, and open more selling opportunities for your business:

Start with dedicated inventory solution

You may have used pen and paper or even excel spreadsheets in the past, but to properly manage multiple sales channels, you need a proper Inventory Solution.

A dedicated inventory software provides toolsets that can provide inventory forecasting, auto-reorder points to prevent stockouts of popular items, while collecting all of your business data to understand trends, seasonality, and demographics to better understand your customers.

A proper inventory management software will serve as the basis for keeping accurate counts between your physical and online stores, and provides a hub for additional tools to be built into your specific business needs, like exporting your financials to Quickbooks.

Implement Inventory Best Practices

Before launching out in the wide world of ecommerce, put your new inventory solution to use with some inventory management best practices. If you already have an online presence, these processes still hold true.

1. Organize, Label, and Scan: Setup your warehouse or backroom in a manner that makes clear designations for all items, including labels to speed up receiving and order fulfillment. For a real boost, add Mobile Inventory Management to employ 2D Barcode scanning and rapid item moving. If space allows, create a dedicated space for order fulfillment to make the pick, pack, and ship process faster.
2. Prioritize products with an ABC analysis: the ABC analysis to prioritize high-value products with low frequency of sales, moderate-value products with moderate frequency of sales, and low-value products with high frequency of sales. This will help you understand which products need the most attention from an inventory management perspective
3. Add Multiple Carts: Once your items are set up, organized, and in your inventory program, you can tie multiple ecommerce carts like Shopify or Amazon through a CSV file, and implement a data exchange that manages all sales while accurately accounting for inventory.
4. Grow: What if your online presence outgrows your warehouse capacity? Your inventory solution and the tools listed above scale with your success. Find additional storage space or facilities, carry your processes over, and your inventory will remain accurate!

What about B2B Businesses?

Everything covered thus far has felt B2C, but good news, it can all apply to your B2B business. Your B2B customers may have different purchase agendas in mind, but they want the same ease of access that we’ve come to expect in a B2C experience.

Let’s review:

1. You need an inventory solution that can also handle ERP needs.
2. Your warehouse has an existing layout, but to speed up order fulfillments, add the Mobile Inventory Solution to enable 2D barcodes, item moves, even order processing.
3. Create a dedicated B2B Sales Portal, allowing your customers to see exactly what you have on hand, order what they need, and keep accurate inventory count on your end.

Like a B2C counterpart, the more streamlined your B2B sales process and the more sales channels you make available, the greater your business’ revenue potential. 

Should you bring your business online? Here’s some benefits:

1. Cost Effective Expansion – You already have the product and the space to store it, adding another “space” for selling products is adding a website or using an existing ecommerce service.
2. Rely on Existing Customers – you have repeat business, let them help spread your business by word of mouth! You can now reach customers from around the world.
3. Always Open – 24/7 sales allows customers to buy when they want. The less friction on their journey to a purchase brings more business.
4. The Data: your inventory software can provide a range of metrics as it relates to sales, items, and seasonality, but your online presence can provide additional insight to customer behaviors and how they found you. This can inform marketing decisions and trends for your business.
5. Best of Both Worlds: sometimes a customer wants to feel the item, try it out, or even have the experience of being out and about. And other times they just want to buy the thing the moment they think about it. With a physical store and online presence, you are providing both.

Still Feeling Overwhelmed?

As a B2C or B2B business owner, if you’re looking to incorporate your store into online offerings, it is essential to understand inventory management. Too often poor inventory management can be a complex challenge to overcome, regardless of your level of expertise, business size, product range, or audience. 

Turn to an inventory expert. 

Your business may need help implementing inventory software, worker training, or general inventory consulting. This is what experts are for, to ensure your business is operating with best practices and providing your workers with the knowledge base for operational efficiency.

Now you get the best of both worlds; proper onboarding and training, while you focus on the business itself.

Takeaway

While the majority of retail shopping still takes place in physical locations, building your online presence can maximize your revenue potential. Don’t let the worry of inventory management prevent you from bringing your goods to a wider customer base.

With a dedicated inventory management software, implementing inventory best practices can help manage inventory across multiple sales channels. These strategies can also be applied to B2B businesses to improve their sales process. Bringing a business online can be cost-effective, expand customer reach, provide valuable data insights, and offer customers the best of both worlds with physical and online shopping options.

If you’d like to know more about bringing your inventory into the online space, reach out!

No matter the type of inventory-based business you work in, your warehouse is the structural “bones” of your operation, from organization, providing storage, serving as material handling, and distribution of goods. Given their significance, warehouses and their (mis)use can eat away at your revenue or even result in significant losses, sometimes without clear indicators.

We’re going to examine  common areas where warehouses lose money, how to identify these areas, and strategies that you can begin starting today to optimize warehouse operations.

WHERE DO WAREHOUSES LOSE MONEY?

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Inventory Management

Inventory management looks different for each company depending on size, industry, and needs, but the basic requirements of accounting for receiving, storing, using, and shipping goods is the crux of the warehouse itself.

Businesses often start with little to no inventory experience and grow into a process that fits the needs for the business early on, but your operation’s current needs require more than the home grown solutions that once worked. 

Poor inventory management can lead to overstocking, understocking, or misplacing inventory altogether, creating lost sales, increased carrying costs, expired goods, and unaccounted items.

Space Utilization

From starting in the garage to full commercial warehouse units, a common sentiment in business is that you “just need more space”, for more items, more equipment, or more workers.

Use of warehouse space is another area that many businesses organically grow into, without fully optimizing its usage, creating optimal routes for storage and picking, or integrating technology to reduce time spent moving between the warehouse floor and offices. 

Poor space utilization can result in wasted space, overcrowding, or inefficient workflows. This can lead to reduced productivity, increased operational costs, and potential safety hazards.

Labor Costs

Labor costs account for a significant portion of warehouse expenses, but these “costs” (employees) are often the greatest untapped portion of your business to grow, change, and bring long-term value.

Employees and contractors can only excel in the space and processes they are given, and as businesses grow or look to improve existing roles and responsibilities, proper inventory training, tools, and warehouse optimizations can create a culture of value and performance.

Inefficient labor management often results in unnecessary overtime costs, unrealized productivity, and increased employee churn.

Shipping and Receiving

Without fast and accurate tracking of items received and shipped, it is difficult to determine the location of materials, estimate delivery times, or resolve issues related to lost or delayed deliveries.

In addition to tracking, warehouses need to optimize shipping and receiving processes to reduce transportation costs, speed up pick and pack times, and reduce handling errors.

Poor shipping and receiving processes lead to employee confusion, delays, mishandled deliveries, lost packages, and increased transportation costs.

HOW TO IDENTIFY WAREHOUSE LOSSES

Analyze

Analyze your financial statements to identify areas with the highest costs and lowest profits, and look for patterns to indicate types of seasonal demand or demand of product type.  Generating Inventory Reports based on sales, stock rotation, or even a custom report to your business can provide key data to inform you on hidden issues.

Audit

Conduct an operational audit to identify inefficiencies and bottlenecks in your warehouse operations, be it a manufacturing process or handling procedure. The goal is to create as simple of a process as possible while maximizing time and labor use.

Feedback

Collect feedback from employees and customers to identify areas for improvement. The data can only tell us so much, and what is dreamed up in the office does not always translate onto the warehouse floor. Seeking transparency creates better processes and a better culture for overall work.

Strategies to Optimize Your Warehouse Operations:

Inventory Management

1. Implement real-time inventory management to accurately track inventory levels.
2. Use demand forecasting to ensure optimal stock levels and reduce stockouts.
3. Establish a first-in, first-out (FIFO) inventory management system to reduce the risk of expired inventory.

Space Utilization

1. Use data analytics to identify areas of low utilization, optimize space usage, and layout storage to fit pick paths with minimal distances.
2. Use vertical storage solutions to maximize floor space, use labels, bins and drawers to organize items and materials for consistent inventory placement.
3. Implement 2D Barcodes and 2D Barcode Scanning to reduce times in receiving, moving and picking inventory, which also reduces almost all human error to inventory accounting.

Labor Cost Reduction

1. Use labor management software to optimize employee scheduling and reduce overtime costs, while proper manufacturing software provides job costing and bills of materials for efficient production.
2. Provide quality on-site training and career development opportunities to maximize employee’s skill sets and incentivize their input for improved processes. Trained and valued employees build culture and lessen turnover.
3. Use performance metrics to identify areas for employee improvement while also identifying the value they provide.

Shipping and Receiving

1. Implement an automated shipping and receiving system to reduce errors and delays.
2. Use a transportation management system to optimize shipping routes and reduce transportation costs.
3. Implement real-time tracking to improve delivery times and customer satisfaction.

Takeaway

Every business loses money in some part of their operation, but the more streamlined your warehouse is, the more your potential revenue can be realized.

Identify where your business’ warehouse may be losing money across its several uses and processes, find the data and employees that can speak to the bottlenecks, and start implementing the strategies listed above to create the best version of your business.

Have a question about inventory, or still not sure where to start? We’ll help you get started.

 

Despite the often sensationalist news headlines, the national economy continues to expand, and many third-party logistics (3PL) businesses continue to see an increase in demand. However, increased competition in the industry and rapid technological growth has made it challenging for 3PLs to grow and remain profitable.

Let’s cover how to increase your 3PL profitability with steps you can take starting right now.

1. Plan and Forecast

This is not a new concept, but its simplicity is often overlooked. One of the most effective ways to increase your 3PL business’s profitability is through proper planning and forecasting.  Retail e-commerce sales alone are expected to grow by 50% over the next four years, along with ancillary industries that feed into it, which means that staying abreast of consumer trends and market conditions is critical. Companies that move and adapt quickly during market expansions survive and profit while slow-to-respond companies pay the price for dragging their feet, if they survive at all.

To stay ahead of the competition, it is crucial to analyze market trends and consumer demand patterns continually, relying both on your own inventory reports and third-party analytics as needed. Developing forecasting models to identify which products are most in demand and at what times can help you adjust inventory levels and allocate resources more efficiently.

2. Customer Retention is Critical

Too often our business attention focuses on new customer acquisition, but what about the customers you have already “won”? Market research shows that the probability of selling to an existing customer is between 60% and 70%, compared to only 5% to 20% for a new customer. Additionally, acquiring a new customer costs anywhere from 5 to 25 times more than keeping an existing one.

To improve your 3PL’s profitability, prioritize excellent customer service and analyze customer accounts to determine where you are making money and where you are losing it. By determining what your top customers have in common, you can replicate your success with them and find more like them.

3. Service Your Core Business

Similar to customer retention, concentrating on your current core business and a specific direction where you see growth opportunities is an effective strategy to increase your 3PL’s profitability. Once you’ve chosen a direction to grow your business, devote your company resources to being better than any other logistics firm in your chosen segment while you expand. 

For example, implementing a 3PL portal can provide existing customers immediate access to your goods, allowing customers to order when it suits them, while also reducing order confusion, and minimizing labor costs. The less time spent on fulfillment allows you to service your core business as you grow to remain competitive, viable, and profitable.

4. Audit Your Processes for Efficiency

Auditing your current warehouse processes for efficiency can offer significant opportunities for cost savings. Every process in your warehouse should be considered, scrutinized, and tested for inefficiencies, including your equipment, storage arrangement, even pallet management process. While it may seem like a cost-saving measure to squeeze one more year out of outdated equipment, upgrading your equipment can save you time and labor in the long run.

5. Update Your Standardized Processes

Our supply chain industry has changed more in the past three to five years than it has in the previous 30 years,  making it absolutely vital to examine, test, and adjust your standard processes. If you are still using the same processes from years ago, it is likely that they were developed using information and standards that may now be obsolete.

Standard processes are important because they enforce safety and security in the warehouse/distribution center environment. Additionally, they provide a baseline against which improvements can be measured, helping to simplify the onboarding and training of new team members. Relying on standard practices can help speed up the training process and ensure that your workforce performs work in a consistent manner.

6. Train Your Employees, Again

Similar to maintaining equipment, your employee’s knowledge base and execution is a key factor in revenue generation. While far too many want to squeeze their workers for every useful minute in a day, an educated and trusted employee creates significantly greater value for the company.

Bring tools and technology to simplify their process, streamline the work, and eliminate the middle-management. Bring certified specialists to teach and train on your most effective tools, from inventory software training to warehouse management, and their ability to provide a greater value of work will pay dividends to culture and business alike.

7. Measure Warehouse Labor Costs to Find Clues to Inefficiencies

Speaking of labor… labor is typically the highest single cost in warehouse operations, but warehouse automation can help reduce labor costs, improve accuracy, and increase throughput. Automated material handling systems can help speed up picking and sorting processes, while robots can handle repetitive tasks like palletizing and packing.

Robots sound outside of your price range? Incorporate 2D scanning and 2D barcodes to quickly capture all the important item information to receive, move, even pick, without needing to manually update systems or counts.

8. Focus on Sustainability

Sustainability has become an increasingly important issue in the logistics industry. Customers are now looking for environmentally responsible companies to do business with, and 3PLs that can demonstrate their commitment to sustainability are more likely to win new business and retain existing customers.

Beyond common environmental sustainability, implementing sustainable practices provide reduction in company waste. For example, creating a calendar for required site maintenance, equipment servicing, and inventory inspection provides planned downtime, less operational waste, and proper stock accounting.

9. Develop Strategic Partnerships

Developing strategic partnerships with other businesses in the logistics industry can help 3PLs expand their service offerings, reduce costs, and increase profitability. By partnering with other logistics providers, 3PLs can offer customers a more comprehensive range of services while also reducing costs through economies of scale.

Strategic partnerships can also help 3PLs expand their geographic reach. By partnering with logistics providers in other regions or countries, 3PLs can offer customers a global logistics solution, opening up new markets and increasing revenue potential.

Takeaway

Optimizing a 3PL business for profitability is as competitive as ever, but the availability of tools and solutions is as great as it has ever been. Consider the numbered strategies as possible solutions for your business’ own pain points, narrow down to the most relevant, and start simple. 

By implementing these strategies, your 3PL business can increase their profitability, improve customer retention, reduce costs, and position themselves for long-term success in a competitive and dynamic industry. It’s essential to communicate the vision and plans for the future with the team, as it helps them facilitate workflows around achieving the goals. By working together, 3PLs can overcome challenges and capitalize on the opportunities presented by a rapidly evolving logistics industry.

 

One of the many challenges facing manufacturing companies is not just the ability to scale a physical process, but scaling the management process that must accompany an increasing production demand. You need more capabilities without adding unnecessary steps, and this is where the strength of a manufacturing specific software like Fishbowl Manufacturing can make all the difference in your business.

Fishbowl Manufacturing, included in their Fishbowl Advanced Product, contains features to fit your specific manufacturing needs. Let’s get into it!

Types of Manufacturing and How Fishbowl Manufacturing Helps

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Batch Manufacturing

Batch manufacturing involves creating products or items in a single batch to meet customer demand, often used in commercial baking or clothing production, and this process is repeated continuously to keep up with incoming consumer needs. Batch manufacturing often works with non-metallic substances such as powder, liquid, minerals, and gasses.

One of the primary benefits of batch manufacturing is the ability to create large quantities of products in a short period. However, it can also result in excess or expired inventory and higher costs if not managed effectively.

Fishbowl Manufacturing provides the ability to set various types of Units of Measure (UOM) for raw goods and materials, and makes use of material expiration tracking, reducing the time and error involved with manual management of inventory or unit conversions. This flexibility helps keep costs down and ensures efficient use of inventory, leading to more reliable manufacturing operations.

Discrete Manufacturing

Discrete manufacturing is a flexible process often used by furniture or electronic production, and involves manufacturing multiple products on a single assembly line. This method is highly customizable using a build-to-order business model, with the downside of the time required to retool machinery and lines for different products, resulting in inefficiency.

Fishbowl Manufacturing allows manufacturers to add one-time items or items with multiple quantities to a Bill of Materials (BOM), providing simple or large-scale customization of orders, which brings greater flexibility while keeping costs down.

Job Shop Manufacturing

Job shop manufacturing is similar to discrete manufacturing in that it is focused on one-off manufacturing jobs, like commercial printing or machining shops. Where the production varies is in the assembly lines, with most of the manufacturing work created by hand or limited automation.

Fishbowl Manufacturing is designed to be flexible and handle a wide range of inventory and manufacturing requirements while also providing Job Costing and Labor Management. As production and material load increases, Fishbowl can handle the extra load, and accurately track costs by project or person. Instruction notes can also be added to line items in a BOM, making it easier for workers to double-check item customization as needed.

Repetitive Manufacturing

Repetitive manufacturing involves the creation of a single product over and over again, from refrigerator manufacturers to beer production. The assembly line does not often change the products they manufacture, they adjust the frequency of production based on demand.

Fishbowl Manufacturing provides manufacturers with Material Resource Planning (MRP) to know when and where materials are needed, while tracking their progress. The ability to plan your resources and demand allow production to scale as needed while eliminating inventory surprises.

How Fishbowl Manufacturing can help any Manufacturer with their Inventory

Every manufacturer faces different demands, but Fishbowl Manufacturing also provides the important inventory solutions to manage the process end-to-end.

1. Inventory management: Fishbowl Manufacturing allows you to track inventory levels in real-time, reducing the risk of stockouts and overstocking.
2. Production planning: You can plan production schedules and track progress, ensuring that orders are fulfilled on time and within budget.
3. Quality control: Fishbowl Manufacturing allows you to monitor quality control throughout the production process, reducing the risk of defects and ensuring customer satisfaction.
4. Cost control: Fishbowl Manufacturing can help you track the costs associated with each stage of the production process, allowing you to identify areas where you can reduce costs and improve efficiency.

How to implement Fishbowl Manufacturing for your business

1. Assess your business needs:  What is your process and what areas does your business need the most help?
2. Pick your solution: Choose the plan that best suits your business needs, user needs, and budget.
3. Onboard Fishbowl Manufacturing: Find the right training to fit your business and provide proper training for your employees.
4. Add Integrations to enhance your process: Fishbowl partners provide additional inventory solutions to make your warehouse runs as efficient as your manufacturing.

When should you update your training for Fishbowl Manufacturing?

Your manufacturing business will inevitably change; new employees join your team, processes need refreshing, new products may require new approaches. In each instance, additional training or consultation can hone both your production process and inventory process. In the same way your equipment and tooling requires maintenance, your business and employees benefit from regular training, which pays dividends in long-term efficiencies.

Takeaway

Manufacturing companies face the dual challenge of scaling both their physical and management processes to meet increasing production demand. Fishbowl Manufacturing provides the feature sets to meet nearly any manufacturing application, while also providing the tools necessary for inventory management, production planning, quality control, and cost control. Add in the right integrations with the proper training, and your manufacturing business can produce and manage your full process at the highest level of efficiency.