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Inventory Mgmt

Inventory Management – A Smart Solution to Supply Change Worries

Some OEM manufacturers follow a more traditional approach, by maintaining a huge inventory of parts and assemblies. One advantage of doing so is that supply chain risks can be minimized or eliminated, but this advantage is more often than not offset by high overhead costs.

Other manufacturers rely on just-in-time shipments of parts to support the leaner in-house business or management practices and processes they have put in place. This is especially true of OEM manufacturers who focus more on assemblies, and no longer manufacture their own parts.

While a just-in-time approach may reduce or eliminate the need for in-house parts inventories, inventory management systems still need to be in place. The problem is, these systems are often distributed among different suppliers, and maintaining overall inventory status in real time can range from being a difficult task, to an impossible one.

Outsourcing Inventory Management as a Solution

It only makes sense for parts suppliers to stock those parts and maintain and  manage their own inventories. This still leaves the ultimate customer with a need to     either find a way to integrate and manage multiple inventory systems, or to consider outsourcing the task.

When parts are being produced by a single outside supplier, there are many benefits to be gained by outsourcing the inventory management task, especially when that supplier     specializes in inventory maintenance and management in addition to manufacturing.

 Some things go up – some things go down.

Having inventories managed remotely yields savings in money, space, and manpower. This is particularly true for small businesses; since a company specializing in parts inventory management can be counted on to perform the task more effectively, efficiently, and often at a much lower cost than is possible in-house.

Like anything else, outsourcing can have its disadvantages; but by choosing the right partner, they can be minimalized to the point of becoming nonexistent.

How Inventory Management Works

Inventory management is a process by which parts are accounted for from the time they are stored, until the time they are delivered or installed. The movement of parts must be tracked, preferably in real-time, and the status of the number of parts remaining in stock must also be tracked, in real-time or periodically, depending upon the need.

Tracking the movement of parts, or the status of parts in stock, can be prohibitively expensive if done manually, and large numbers of parts and part types are involved. In addition, manual inventory management techniques usually fall far short in performance when supporting just-in-time delivery processes.

Consequently, today’s inventory management systems are automated, software based, and capable of operating without human intervention. These systems can be used to manage the inventory of a single source supplier, or multiple suppliers.

A typical example: Parts are stored in bins. Sensors are used to measure the weight of each bin (which is then converted the quantity of its contents). The sensors can be monitored on a weekly, daily, or even an hourly basis.

The sensors are hardwired (wireless is a much less expensive option) to a computer, which can be a PC, or even a laptop. The PC, which contains proprietary inventory management software and acts as a server, can then transmit real time inventory status to stakeholders, manufacturers, or suppliers.

The Advantages of Outsourcing Inventory Management

  • An automated inventory management system can highly supportive of JIT deliveries, even from a remote location.
  • In-house administrative costs associated with inventory management can be eliminated or substantially reduced.
  • Small businesses in particular can at times find it difficult to handle all aspects of their business processes internally; or find doing so to be too costly or inefficient.
  • A supplier that specializes in inventory management can perform the task at a lower cost; without compromising quality of service.
  • By outsourcing inventory management, a supporting process, a business can place a greater focus and emphasis on its core processes.
  • The inventory manager can take on some of the risks associated with keeping a supply chain fully functioning and intact, and those risks can be significantly lessened since the vendor has the background and expertise, and the management system software has the necessary functionality, to keep the part delivery process running smoothly; especially for just-in-time applications.

The bottom line: by outsourcing the inventory management process to where the expertise and wherewithal lies, risk can be mitigated, productivity can be improved, and costs can be lowered.


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For further information about our inventory management services, contact us directly via the convenient website form or request a form here. We welcome your inquiries.

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From a contract manufacturing firm, BuntyLLC evolved into a full service custom machined, forged and cast metal parts fabrication enterprise. We supply global solutions from our headquarters in Greenville, South Carolina.

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