Purchasing and maintaining the right metals inventory can ensure consistent product availability and cash flow—letting you smooth operations, maximize efficiency and bolster productivity.
But to effectively optimize your inventory, you have to see it as more than the materials in your warehouse. Cost, quality, supply chain risks and logistics are all factors that can significantly impact your business operations and bottom line.
To make sure you’re managing your inventory as effectively as possible, consider integrating the following steps into your approach:
- View your inventory in the context of the bigger business picture
What’s more important to you—paying a stable price for materials over the long term, or capturing the lowest price in the market? Do you value inventory flexibility—buying materials as they’re needed—or can you afford to buy in bulk?
There’s no wrong answer here. Your ideal metal inventory level and the quality of metal you require are unique to your organization. But clearly understanding those needs (and how much they vary) will inform your inventory management process.
As you strive to find ways to optimize your inventory, consider the following questions:
- What creates the demand for your inventory?
- What organizational processes are affected by the material need?
- What is the optimum volume of inventory required?
The answers to these questions will determine your purchasing goals and act as the starting point to your customized inventory management plan.
- Determine the true cost of suboptimal inventory levels
Purchasing inventory is a balancing act. Buy too little and you may not be able to finish a production run, leading to operational disruptions. Or perhaps you won’t find the same material again at the same price or quality, leading to further cost and production issues.
Buy too much, on the other hand, and you can end up stuck with materials that may be overpriced compared to current market value, that become obsolete as your designs evolve or that you can’t use due to demand changes.
When determining your ideal inventory levels, therefore, make sure you consider all related costs of having both too little and too much. If this is beyond your level of expertise, you can always reach out Samuel Service Center for inventory management advice.
- Pay attention to quality
When calculating the overall cost of your inventory, don’t discount quality. While high-quality metal might cost more upfront, that additional cost may be worth it.
For instance, if you lock into a low-price contract with a supplier, you may receive material that varies in quality or that is lower-quality than you’re used to. If the material doesn’t meet your production needs, you could end up with manufacturing defects that could dramatically delay production. Or it may not always be the right grade for your industry, forcing you to turn deliveries away.
To avoid these outcomes, it’s important to clearly identify the quality you need before signing on the dotted line. If it’s difficult to secure your optimal quality levels, it may make sense to avoid dealing in the open market and work instead with a service center that can help you source the right material from the right suppliers.
Support, when you need it
When evaluating your metals supply options, it’s important to consider all factors that are critical to the effective operation of your business.
At Samuel, our experts are well-equipped to identify inventory risks on the horizon and craft solutions to rectify them. With a vast network of suppliers and proven methods to help manufacturers determine their product needs, we can help you devise an inventory management strategy that’s right for you.