The flow of inventory is constant in any organization, and the effective management of all those spare parts and office supplies can have a major impact on the bottom line. Take Chaves County, New Mexico, for example.
The County serves over 65,000 citizens and spans over 6,000 square miles. Their county government works hard to support their community and so their operations are complex. They were facing some challenges with their inventory management but were able to overcome them.
1. Automate Processes
The previous system for managing inventory involved keeping up with spreadsheets and relying on memory. Employees had to fill out an Excel request form when they needed an item. If an item was discontinued or switched to a slightly different version, then it was up to the Purchasing Director to remember to update the spreadsheet. If she forgot, then people could order something that was no longer available and she would have to contact them about changing their order. The old process was cumbersome and a challenge to keep everything updated. Now, having implemented a software to automate this process, filling orders takes the Purchasing Director much less time—an hour or two compares to four or five days previously. The inventory ordering process is more streamlined for requestors, simpler for the Purchasing Director, and there’s no need to rely on anyone’s memory.
2. Examine Usage and Trends
Having a system in place allowed the Purchasing Director to have a better understanding of their inventory usage and habits. Now, if an employee requests a specific item, she’s able to introduce less expensive options that are comparable to what they want. She is also better able to negotiate their purchasing contracts because she has data on how much they purchase per year, which gives her clout to bargin with. Overall, the system lets her ensure she is keeping the proper inventory levels on hand. All of the tracking and documentation of inventory movement and supply saves her a lot of time if she needs to provide information to auditors.
3. Report on Data
The third big benefit the County has seen is from the improved ability to produce reports. The Purchasing Director can quickly run reports to show inventory totals by department and then put all of that in to a summary spreadsheet to pass along to the Finance Department. Pulling together all of that data use to take her an entire work day, but now takes minutes.
Overall, the efficiencies the County has seen have resulted in major time and money savings. Chaves County was able to reduce their inventory costs by 65% and save their Purchasing Director substantial chunks of time—that’s time that she can put towards other activities to add value to their organization.