There is much to learn from manufacturers regarding raw material warehouse management, including inventory management and warehouse operations tips. In addition to proper storage and handling of raw materials, a plethora of other tasks must be completed for effective management. However, understanding the meaning of raw material supply chain management is the first step toward mastering this process.
Raw Material Supply Chain Management: What About It??
Raw material warehouses emphasize the storage, distribution, transportation, and assembly of raw materials useful for manufacturing businesses. Every business relies on material logistics, so selecting a warehouse partner that practices proper storage and management techniques are crucial. Additionally, raw material storage requires many management attributes not common to all warehouses. There are a variety of requirements for storage that vary by individual and should be tracked and understood accordingly. Remember, you will spend less money replacing and repairing products if you work with a materials management partner which provides high-quality services.
To be more specific, hiring the right raw materials warehouse management partner will reduce operating costs and improve efficiency. Proper handling, moving, packing, and storing techniques will reduce operating costs.
Ideally, warehouses should be able to accommodate various product sizes, shapes, and weights. Among these products are the following:
- Unprocessed material
- Supplies
- Raw material
- Rejected items
- Scraps
- Partially finished items
- Packaging materials
The key objectives of warehouse management are to reduce production costs and raw material prices while also helping to optimize production processes.
Keeping an eye on efficiency and overall productivity while maintaining a safe work environment is also crucial.
A List of Top Tips for The Management of Raw Materials Warehouses
Choose a warehouse partner who adheres to the best storage practices when investing your time, money, and resources.
1. Accurate Inventory Process
Supply chain management requires an accurate and up-to-date inventory. An inventory management system should be in place at warehouses specializing in natural materials to facilitate tracking each component within the facility.
Warehouses should perform inventory balancing regularly and use sales projections to estimate the number of units in stock. As a precaution, backup or safety stocks should also be maintained to address quality issues, cover sudden increases in demand, and reduce return rates. Instead of relying on what has already been predicted, it is advisable to determine projections based on factors such as market changes, seasonality, and other external factors.
Occasionally, warehouses may suffer from overstocking situations due to projections exceeding on-ground or real-time estimates. Several factors may contribute to these changes, including a slowdown in unit sales, an overly optimistic growth outlook, and other miscalculations.
Another issue that can hinder the entire supply chain is the understocking of materials. There are several reasons for this, including disruptions in the supply chain, under-forecasting of production, and transportation issues.
2. Practical Layout
When a warehouse is well organized, it is easier to store components vital to a business’s operation. Having a proper layout reduces storage costs and waste and improves overall productivity.
A practical layout is characterized by the following:
- Streamlined material handling
- Optimized space utilization
- Careful material supervision
- Fixed position storage
- Random storage
- Categorized storage in selected locations
- Minimizing obsolescence
The following design factors above contribute to a layout’s effectiveness and efficiency.
3. Accurate Inventory Process
Supply chain management requires an accurate and up-to-date inventory. An inventory management system should be in place at warehouses specializing in natural materials to facilitate tracking each component within the facility.
Warehouses should perform inventory balancing regularly and use sales projections to estimate the number of units in stock. As a precaution, backup or safety stocks should also be maintained to address quality issues, cover sudden increases in demand, and reduce return rates. Instead of relying on what has already been predicted, it is advisable to determine projections based on factors such as market changes, seasonality, and other external factors.
Occasionally, warehouses may suffer from overstocking situations due to projections exceeding on-ground or real-time estimates. Several factors may contribute to these changes, including a slowdown in unit sales, an overly optimistic growth outlook, and other miscalculations.
Another issue that can hinder the entire supply chain is the understocking of materials. There are several reasons for this, including disruptions in the supply chain, under-forecasting of production, and transportation issues.
4. Compliance With Quality Assurance and Standards
Achieving quality assurance and traceability is an integral part of a successful supply chain management process, but when it comes to raw materials, things are a bit more complex. As a result of quality rejections, material shortages may occur, and shipping replacements may increase costs.
When components and electronics are being shipped out of a country, traceability is crucial since the receiving country may have regulations controlling the importation of raw materials.
It is, therefore, imperative for smaller businesses to maintain the highest level of compliance and quality. Costs and prices may increase significantly without effective raw material management, particularly if production is interrupted.
Optimize the Storage of Your Supply Chain Materials
Do you need a warehousing solution to manage the raw material inventory for the manufacturing process? WarehousingIT has everything your business needs to boost its efficiency. Our nationwide network of over 1500 warehouses can make it happen; contact us today to get started.
