The search for stock management: a mobile solution approach Stock management or commercial management?

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The search for stock management is the main need expressed; but in fact it is the result of a management of purchases and sales. The choice is difficult as the vocabulary used is so specialised and nuanced, such as the difference between manufacturing management and production management ...

Faced with the number of requests from manufacturing SMEs/SMIs who are looking for "stock management software" and who cannot simply find this software, and who then choose "commercial management" alone (without the production module) on the pretext that it says in the commercial management specifications: "stock management", I cannot help explaining to them why they are making a mistake which impacts their future.

These requests come from companies that have workshops, which produce from raw materials for which they want to manage the stock.

It must be understood that stock management is not a function in itself independent of the rest of the company’s management, it is a result of the management of purchases and consumption of materials on manufacturing orders for these manufacturing companies.

STOCK = INPUTS-OUTPUT

A common solution for error-free data entry and to request (from its publisher and suppliers) to put barcodes on the BL and order and invoice numbers. Another solution is then that we use character recognition (OCR) to record part numbers: see OCR mobile character recognition: interface use and test apps.

Let’s see then for trade and manufacturing cases separately

In trading companies, stock management is the result of the purchase and resale of the same item, without modification of that item. Sometimes, this item is included in a "bill of material" (list of items making up the finished product known as "compound") which is used to pick to sell an item made up of several items without transformation or disappearance of the component items. To carry out this type of operation, it is common to use commercial management: this is more than enough.

STOCK NEGOTIATIONS = PURCHASES - SALES delivered

It is then sufficient to enter the entries and exits of the stock by linking them to an accounting document: the supplier order or its BL for the entries and the sales order or BL for the exits.

In a manufacturing company, the component items are said to be "consumed" in other words they are transformed or disappear in an operation that is part of the range. Only production management or "CAM" allows these operations to be carried out correctly and monitored.

STOCK MP [1]= PURCHASES - CONSUMPTION on OF / Order
STOCK PF [2]= OF finis - SALE

Example for a company manufacturing resin moulded plates : a plate reference ZZ is composed of 2kg of resin reference YY and 300 gr of fibreglass (mat) reference XX.
XX and YY are the items in the ZZ nomenclature.
The moulding operation consumes these 2 articles in the proportions indicated without it being possible to do the reverse operation.

It can be said that the product cost is equal to that of the product nomenclature, which in the end would be the same if a simple commercial management were used.

Only there are two major differences (not to mention the absence of batch traceability and tool tracking, monitoring of real time):

- the transformation operation is carried out well before the sale of the finished article: the consumption and therefore the decrease in stock is carried out on the date of the operation, whereas in a commercial management the consumption of articles ZZ and XX is carried out when the BL or the preparation order is issued. Moreover, this OF without raw materials in stock will not necessarily generate a need to purchase materials for the date of the operation, given the supplier’s delivery time.
- the cost price of the final product is made up of a non-negligible share of operator time with an hourly rate: one could imagine using commercial management and putting "operator hours in stock": the consumption of these hours is not a problem whereas purchasing is impossible in commercial management. The control of production times is also impossible.

Some commercial management systems integrate what they call "manufacturing management" which allows ranges to be made effectively but cannot launch supplies to date, in cascade, nor manage planning, which is found in a production management system known as "MRP".

Because of the first difference, the "stock management to date" function (also called "MRP" = Manufacturing resource planning) is required, which is not always implemented in simple commercial management: only this function enables the system to consider forecast stock shortages and purchase proposals (for example with an alert on "minimum stock").

Hoping that this little reminder will prevent a certain number of companies from finding themselves faced with a commercial proposal that is attractive in terms of price, install, parameterise and become aware of these differences in order to request an extension by the production module (if it exists) which is, as if by chance, then much less interesting when the unhappy customer no longer has the advantage of a negotiating position by comparison.

If this last module is not developed: there is only one alternative to waiting or standing still: change this commercial management: the investment in licences and time is then simply lost!

Give yourself the means to change without making a mistake: we associate the hosting of the Open-Source ERP DOLIBARR with the mobile production and traceability modules corresponding to your needs and a tailor-made solution for barcode / rfid traceability and label printing : Data entry, mobile printing, stock management on hosted ERP DOLIBARR

Footnotes

[1Raw Material

[2Finished Product