Inventory carrying costs are one of the major problems in jewellery manufacturing. Some of these costs are storage cost, capital tie up cost, risk of theft, risk of price changes. Some of the main costs associated with inventory management include the following:
Capital Costs
Jewellery makers invest large amounts of money in materials and products. Gold and diamonds are expensive and need upfront payments. Changes in gold prices make this even harder to manage.
Storage Costs:
Jewellery needs safe and secure storage. Special vaults, lockers, and insurance are needed. These add to the costs of holding inventory.
Risk Costs
Jewellery items are at risk of theft, damage, and becoming outdated. Fashion trends and market price changes increase these risks.
Service Costs
Manufacturers must meet customer needs quickly. Holding too much stock increases costs. Having too little stock may lose customers.
Lean Manufacturing
The lean principles involve constantly striving to cut out any unnecessary steps or resources in the manufacturing process. Waste in this context can mean various things like time, materials, labour, or inefficient planning. Lean Manufacturing identifies eight types of waste: over/under production, waiting, unnecessary transportation, over/under processing, excess inventory, unnecessary motion, defects, and unused creativity of team members. The aim of lean is to create value in the most efficient and safe way possible. This is done by respecting people, creating value, reducing waste, focusing on smooth processes, continuously improving, and optimizing the entire system.
Automation
Automated processes can reduce labour costs, minimise errors, increase production speed, and enhance overall precision. Automation can also improve efficiency, reduce costs, and increase scalability. The different types of automation in manufacturing include computer-integrated manufacturing (CIM), the use of robots, and the automation of data capture to improve the efficiency of information and provide insights. By automating some business tasks, companies can free up workers to do more cognitively intensive tasks.”
Advanced Automation
Automated processes can reduce labour costs, minimise errors, increase production speed, and enhance overall precision. Automation can also improve efficiency, reduce costs, and increase scalability. The different types of automation in manufacturing include computer-integrated manufacturing (CIM), the use of robots, and the automation of data capture to improve the efficiency of information and provide insights. By automating some business tasks, companies can free up workers to do more cognitively intensive tasks.”
Predictive Maintenance
Predictive maintenance techniques include various methods such as vibration analysis, acoustic analysis monitoring, oil analysis, and infrared thermography analysis, which involve the use of sensors and data analytics to forecast when maintenance will be needed and avoid costly situations.”
Data Analytics
BI enables the automation of various tasks, leading to reduced labour and costs, while also providing real-time data and actionable insights for data-driven decision-making.
Just-In-Time Inventory Management
Just-in-time (JIT) inventory management involves ordering and receiving inventory only when it’s needed for production, minimising excess stock. This system reduces carrying costs and the risk of obsolete inventory. Successful implementation requires close coordination with suppliers and efficient production planning.
Sustainable Practices
Sustainable practices, such as using eco-friendly materials and renewable energy sources, contribute to cost reduction by minimising waste, energy consumption, and long-term operational expenses. In addition, companies often find cost efficiencies in recycling and reusing materials within a circular economy model.
Ways to Reduce Inventory Costs
1. An ERP system like SUNFACET helps manage inventory better. It gives real-time data on stock levels, demand, and supply chains. This prevents overstocking and reduces costs.
2. Buy raw materials only when needed. This reduces storage costs and risks like theft. It also avoids losses from price changes.
3. Study gold and gemstone price trends. This helps in buying materials at the right time. It also reduces holding costs.
4. Separate items based on value and demand. Keep tight control over expensive items like diamonds. Ensure a steady supply of popular designs.
Jewellery manufacturing depends on managing costs well. Lowering carrying costs increases profits and improves cash flow. It allows investment in new ideas and better customer service.
SUNFACET ERP helps manufacturers keep the right balance. They can maintain stock levels while keeping costs low. This ensures growth and success in a jewellery manufacturing.
If you are in a jewellery manufacturing business and are interested in reducing carrying costs, then we would like to assist you. Get in touch with us:
Phone: +971 55 220 1715
Email: [email protected]
Our Locations: UAE, KSA, India, Hong Kong
Visit Our Website: www.suntech-global.com
