Accurate inventory forecasting is one of the pillars to profitability for a manufacturer or distributor. Any business that stores products in a warehouse needs to pay close attention to seasonal trends and how to manage inventory properly. An important reason metal packaging can enhance inventory forecasts is because it offers long-term value for unsold items. Here's a look at the often overlooked relationship between packaging materials and superb inventory management.
One of the biggest advantages to metal packaging is its durability. It can withstand extreme temperatures and various types of disruptive situations. Plastic, paper and glass packaging all are subject to destruction from mishandling in storage as well as in the distribution process. When a worker drops a glass bottle, it shatters and that's the end of its chances to be sold for profit. Metal, by contrast, is more indestructible, giving it longer potential shelf life at a warehouse or retail outlet.
Inventory must be well organized for management to keep an accurate count of units. The beauty of metal is that it can be shaped in infinite ways for easily and uniformly stacking within cardboard containers. Aluminum is lightweight compared with other metals, making it easy to move from one place to another.
The more space-efficient a warehouse is, the more items it can store. Warehouses that aren't well organized can be full of clutter, which reduces profits, productivity and accuracy in inventory counts. When the numbers game becomes blurred with omissions and lost items, forecasting results will be unreliable.
Another advantage to using metal for packaging is that it can be easily recycled and reused endless times. The quality of recycled metal rivals new metal while the cost is lower. Recycling metal allows for less strain on the environment since the production of new metal releases large amounts of greenhouse gases. Furthermore, metal packaging is less likely to wind up in a landfill due to the spread of recycle bins and the fact many environmentally-conscious consumers reuse metal containers.
Cutting waste is a major factor in aiming for economic efficiency. Since metal containers offer long-term protection to enclosed products, they are less likely to get wasted.
RF chips have become vital to warehouses for tracking inventory. Prior to their arrival in the commercial world, there were countless ways for inventory to be compromised. An unhappy insider doing the graveyard shift, for example, could find ways to steal merchandise without anyone ever knowing until an accountant noticed long after it became missing.
The advent of RFID tags embedded in product packaging has helped supply chain managers dramatically cut losses. Every unit can now be located within a certain proximity, allowing for more accurate inventory counts. That leads to better forecasting which items need to be replenished. Air-cavity packaging is ideal for the performance of RFID chips. Metal fits this category, which is why it's used by military and the aerospace industry.
Experienced warehouse managers know they are playing a numbers game at all levels of supply chain activity. In order to prove they can oversee inventory efficiently, they must find appropriate ways to cut costs and minimize waste. In some cases, unsold inventory can be repurposed, but it can also rack up losses. The best way to maximize inventory is to store it where it isn't degraded by temperature or other environmental factors.
Ideally, the packaging should preserve the product for a long time (as in years or months, not days or weeks). The packaging should be able to withstand mishandling, flooding, fire or other disasters. Paper and plastic don't hold up well in extreme situations. Metal, however, is resistant to corrosion, fire, rust, mold and water damage. The chemical reaction between water and aluminum is so slow that it takes about 250 years for the metal to decompose in water.
Knowing metal containers have better longevity than paper or plastic containers allows for more accurate long-term inventory forecasting. The longer shelf life of metal gives the company a better chance to eventually sell all units before ordering more. When using weaker shorter-term packaging materials, forecasting becomes cluttered with unknowns. Additionally, management is under extra pressure to sell products by a certain expiration date.
Profitability is the main goal of any business. When losses cut into profit margins, managers face discomfort and an uncertain future. Accurate and consistent forecasting is the lane successful inventory managers work in. Studying historical trends to find seasonal patterns is integral to this quest of making accurate predictions for ordering supplies. Since metal is resilient in all seasons and many types of disasters, it's an ideal choice for packaging that leads to better luck in forecasting inventory.