How Accurate Measurements Dramatically Improve Inventory Reporting and Financial Management

Managing inventory effectively is one of the most important components of running a successful organization. The effective management of a company's inventory is also being increasingly viewed as a key component of financial health and profitability, and rightfully so! What this means is that key executives such as CFO's are beginning to take an active role in supply chain and inventory decisions because they finally realize the significant impact these choices have on the bottom line. For example, inaccurately calculating inventory balance will cause a domino effect of incorrect calculations of cost of goods and ultimately gross profit and net income. The only complication this presents to executives in the bulk solids and process industries is that the lack of inventory "visibility" can be taken quite literally.

Finding a Better Way to Measure

It's obvious when we say that accurately measuring bulk solids is important for inventory control and financial management; however, this is much easier said than done and using traditional measurement devices may not be the best way. The problem with measuring bulk solids is that unlike liquids, the surface of solid materials is rarely flat, often with peaks and troughs that change as the vessel is filled and emptied. Traditional manual measurements using dipping tapes are time consuming, inaccurate, and fail to provide ready-to-use data that is needed to support proper inventory management. Besides these disadvantages, these methods also present safety concerns involving employees working in hazardous locations.

Using automated solutions may sound more appealing, but they too come with issues such as not being able to take into account variations caused by peaks and troughs, making them just as unreliable. Thankfully new technologies such as 3D solids scanners are beginning to replace traditional single point level measurements in order to provide accurate total volume measurement of solids. They even offer visualization of peaks and troughs within the vessels. The accurate measurements create a 3D visualization of the actual allocation of product within the container for continuous display on computer screens. Nothing has been as accurate or remarkable thus far.

The Benefits of 3D Scanners

Knowing the data that the 3D scanners provide enables the company to easily calculate product volume by knowing the container dimensions. This provides immediate and accurate listing of inventory value at any given time. The implications of this are very positive. Now, companies can effectively manage their inventory and ensure they have the right amount of stock in the right place at the right time. The new measurement technology saves between eight and thirteen percent of on-hand inventory costs! Based on annual inventory carrying costs of 25-52 percent, this translates into a lot of money! Needless to say the investment in the 3D solids scanner quickly pays for itself.

Safety First

In order to avoid inventory uncertainty most companies carry "safety stock" and finding the right amount of safety stock to carry can have significant financial impact on business. Too much and you've increased your inventory cost, and the product can spoil, expire or be damaged. Too little and you risk situations where you are short in stock. Luckily 3D scanning technology will put an end to all the uncertainty and provide a reliable and accurate measurement of inventory at all times, reducing costs and saving money!

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