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Effective Inventory Management for Small- to Medium-Sized Manufacturing Companies
By Ningyuan Tu, MS Student, Northeastern University, and Alana Petrusiw, Marketing Specialist, Torrey Hills Technologies
scheduled and payments transferred. For busi- nesses, virtual meetings, smart digitally delivered ads and CRMs have been widely adopted. Now, the time is right to apply these ideas to inventory man- agement. With the acceleration of economic globalization
N
and specialization, competition is becoming fiercer than ever and the production industry is undergoing
owadays, it seems that everything can be done online. For individual consumers, you can have groceries delivered, appointments
inventory management system, I volunteered at Torrey Hills Technologies, LLC. This is a small manufacturing company headquartered in San Diego, California. Over the years, the company has expanded its business from microelectronics pack- aging components and refractory metals to include solar cell and thick film manufacturing equipment, such as three roll mills and planetary ball mills, to name a few.
The Evaluation Process As a volunteer at Torrey Hills, I helped the
company to set up an inventory system. In order to meet all of the company’s needs, I conducted a study of the inventory management software avail- able on the market. Four types of software were se- lected for evaluation. Figure 1 shows the result of software evaluation. For each factor, a score was given in the range of 1 to 5. The higher the score, the better the software is rated. The factors are arranged according to the de-
Figure 1: comparison of four types of inventory management software.
profound changes. Through planned production and modern-day inventory management, manufacturing companies can achieve better margins, serve cus- tomers more efficiently, and adapt nicely to the ever- changing economic environment. To investigate the key to building an effective
gree of importance. The most important factor is function. Torrey Hills Technologies was looking for a system that can: locate the inventory quickly and accurately, have a clear presentation of the quan- tity in stock and the quantity ordered and detect low inventory in a timely manner. The next important factors were security and
ease of operation. Since the software company is a third party service provider, it was important to gauge their ability to safeguard their customers’ business interests. Ease of operation is also very
Figure 2: demo image of Zoho inventory management software.
petition among various software providers leads to pricers that are very reasonable. When choosing software, the target fee was under $60 per month. According to research, the maintenance and man- agement of mechanical equipment of large manu- facturing companies only accounts for 4 to 10 per- cent of the production cost, while the inventory
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important, in the sense that a friendly interface can greatly shorten the time to learn and ensure the accuracy of the inventory system. Then there is the price, which is related to the operating cost of a company. Fortunately, the com-
May, 2020
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