Real-time management and thorough quality assurance provide good balance security

To begin with, what is balance security?

The term inventory balance refers to the quantity of a specific item available in a specific warehouse at a given time. Balance security is about ensuring the accuracy of inventory balance data. It is crucial for production to flow without interruption and for correct financial follow-ups and decision-making within purchasing and production, explains Elisabeth.

Why is balance security so important?

By maintaining high balance security, the risk of misunderstandings and errors is reduced. This affects everything from delivery capacity to finances and compliance.

We see the need to address the fundamental problem of low balance security. Historically, a lot of time has been spent on total inventory where the business stood still, sometimes for several days, to count everything. It requires a lot of manpower, is tiring and involves the risk of manual errors, emphasizes Elisabeth.

Really take the time to define the rules for when Products in Process (PIP) with its sub-items and packaging are consumed. Principles for when the balance is considered consumed and how it should be linked to the right order need to be defined in detail. This will create order and order that benefits the entire flow, emphasizes Elisabeth

How is system support related to balance security?

The path from the warehouse shelf to the customer involves many steps of value addition and internal management. The goods can be pre-picked, picked, checked, packed, consolidated and finally shipped. During this process, orders may also need to be cancelled, which requires efficient and controlled return of the goods.

Regardless of which principles for material handling are applied, there are many detailed requirements for the use and follow-up of materials to be handled. All of these tailored regulations are handled in real time with a Warehouse Management System (WMS). With good processes for receiving and withdrawing from warehouses and storage, the balance is kept correct. One basis is that movements are logged and acknowledged in real time, Elisabeth continues.

The volume of the item and its properties for picking/packing should be as close to reality as possible in the WMS, while business rules and financial balances should be handled in the Business System (ERP), Elisabeth explains.

When is it appropriate to invest in system support for increased balance security?

In modern WMS, detailed rules and systems are created that keep the balance updated. This is needed to be able to proactively feedback when, for example, a location or load carrier is expected to be empty. It may also be the case that the operator discovers that the expected balance is not at the location and can then immediately inventory the balance after checking the total balance.

Furthermore, Elisabeth reminds us that goods may need to be handled in different types of units, and it is important to have logic that supports everything from piece goods, meter goods to weight goods.

All of these unique business needs and crucial details are handled automatically with a Warehouse Management System (WMS), Elisabeth explains.

Finally, what are your top three tips that you would like to pass on to anyone who wants to increase their balance security?

• Detail your consumption management. Clearly define concepts such as "consumed" for products in progress (PIA) with all its components.
• Automate balance deductions and make it easy for operators to immediately act on discrepancies.
• Invest in a system support that can manage your detailed regulations for consumption and material management in real time.

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