It turned out that the necessary materials and components were not in stock. The reason, however, was the lack of competent inventory management, in particular the lack of automation, i.e. the min-max system.
Failure to manage inventory levels effectively can have serious consequences, as it can lead to production delays, lost sales and reduced customer satisfaction.
Well, in 2016 Tesla had to shut down production at its California factory due to a shortage of parts. The company cited "production bottlenecks" as the reason for the shutdown, and it was later revealed that the lack of a proper inventory management system was one of the main causes. Tesla is just one example of many, and the problem does not spare large, medium or small enterprises.
A min-max system ensures that inventory levels remain within a specific range (thus it prevents disruptions). It works by setting a minimum stocking level, and when this level is breached, an alert or reorder is triggered to reach the maximum stocking level of a particular item. The appropriate minimum and maximum levels for each item must be determined by considering various factors such as supplier delivery speed, item usage over time, and the need for spares.
In today's technologically advanced world, relying on a manual method is not a practical solution. There is a high likelihood of errors due to the so-called human factor, which can result in shortages or overstocking in the warehouse. Furthermore, the lack of a unified information system in inventory management can create gaps in data, causing problems in making informed decisions. One more disadvantage of manual inventory-taking is the tendency of supply managers to rely on their personal experience. In addition to the aforementioned risks due to human error, this can lead to the company becoming dependent on supposedly 'irreplaceable and experienced' employees.
The 5S Control software offers a powerful solution for businesses seeking to automate inventory control. With its advanced tracking capabilities, our software can monitor inventory usage in real-time and provide timely alerts when action needs to be taken. This means that businesses can maintain optimal inventory levels and ensure that they never run out of critical items, while also reducing costs and increasing efficiency.
By using Inventory Control, companies can streamline their inventory management processes and focus on what matters most - delivering high-quality products and services to their customers.