Using cloud-based manufacturing software, a distributor or manufacturer can expect increased sales and profitability on average of 10% to 20%. According to Cynthia Mynarowski, CEO of Seva Technologies, "The leading brands we work with on our platform see on average an increase in sales volume of over 55% and on average close to $1 million in additional profit per year within 12 months."
A recent survey by the Manufacturing Systems Integration Division (MSID) at AMT— The Association for Manufacturing Technology shows that more than half of all manufacturers use some form of data collection technology. Cloud-based manufacturing software is becoming one of the most popular applications for collecting data from these devices. Manufacturers report benefits such as:
• Increased efficiency through improved planning and management
• Increased sales that result from having the right products in the right places at the right times
• Greater customer satisfaction (which results in repeat business)
• Reduced operational costs
Since inventory management can have a big effect on a manufacturer's profitability, it is no wonder why many manufacturers are turning to cloud-based manufacturing software and here are 11 reasons why:
1. Improved Accuracy of Inventory Levels
A manufacturer's biggest benefit from using cloud-based manufacturing software is accurate inventory tracking. According to IDC Research, one in five companies lose over $500,000 per year due to inaccurate physical inventories. The study also showed that traditional methods for managing physical inventories cost U.S.-based manufacturers $1.6 trillion per year while totaling $400 billion for European manufacturers annually.
Cloud-based software offers benefits such as easy access to inventory levels across multiple warehouses and the ability to track inventory in transit or at customer locations. When inventory is accurately tracked, fewer out-of-stock situations and less excess stock are sitting on shelves. With greater accuracy comes a better sense of a company's true market demand, leading to more informed business decisions regarding pricing and discounts offered. By quickly adjusting prices based on excess or shortages of certain items, a manufacturer can have more control over their bottom line. In the long run, this leads to increased profitability and sales growth.
Manufacturers using cloud-based software can also get up-to-date information on inventory levels, so they can avoid having too much or not enough product at locations throughout the supply chain. This allows them to manage their inventory better and reduce buying costs.
2. Ability to Use Technology in Real-Time
Cloud-based software allows manufacturers to have real-time access to their inventory across multiple facilities or warehouses. Manufacturers no longer have to wait for someone else to check stock levels or rely on outdated methods of manually entering inventory amounts into spreadsheets using excel. With the ability to see up-to-the-minute data, manufacturers can make informed business decisions based on current market conditions.
3. Improved Customer Service
It is an unfortunate but common situation to have a customer place an order for an item only to find out the company does not have enough available stock. Not having enough inventory can cause businesses to lose customers, especially if they cannot fill the order in time for a holiday or special event.
Cloud-based manufacturing software allows manufacturers to cut down on lost sales by making it easy for customers and other associates to check current product levels at different locations. Virtual "tours" allow users to visualize the locations throughout the supply chain where items are stored. This helps ensure that there is always enough product within reach, so every customer can purchase their desired item from any location, increasing sales and developing brand loyalty.
4. Ability for Others to View Inventory Status
Businesses can quickly and easily share information with authorized users with cloud-based software. This enables different supply chain members to access locations where inventory is rapidly stored.
5. Ability for Manufacturers to Set Up Alerts on Low Inventory Levels
For example, less than 100 units are available. Manufacturers using cloud-based software can set up automated alerts that notify designated company associates when low inventory levels are reached at any of the company's locations.
6. No Need for Back-Office Staff or IT Personnel to Set Up Hardware or Software
Or ongoing maintenance costs connected with traditional onsite server hardware. It's also less overall cost per user than traditional IT systems.
7. Ability to Increase Accuracy in Forecasting Demand Based on Real-Time Inventory Information
Which can help manufacturers improve pricing and product mix decisions. Manufacturers using cloud-based manufacturing software can make better decisions regarding their inventory levels. By having real-time access to their data, manufacturers can better understand what is selling and what items customers prefer. This information helps companies achieve a more accurate forecast for replenishing stock or offering discounts on certain products.
8. Ease of use with automatic updates
A cloud-based software simplifies the process because all users have to do is log in from any device connected to the internet to access inventory levels product tour functions. Cloud-based software allows manufacturers to maintain a low cost per user since there is no need for dedicated IT staff. Updates are deployed automatically, so manufacturers don't have to worry about using outdated software or being forced to pay associated fees for new updates.
9. Ability to improve company operations and increase profits
Cloud-based manufacturing software helps manufacturing firms simplify the process of keeping track of stock levels, order processing, and shipping information across multiple locations in real-time. This enhances efficiency and helps streamline productivity at every level throughout the supply chain. Manufacturers who use cloud-powered software can make better business decisions with more reliable data, leading to increased profits and ROI (return on investment).
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