8 Powerful Lean Six Sigma Tools for Streamlined Manufacturing

Posted on March 2, 2018 by dearsyst

Lean Six Sigma is the system preferred by businesses around the world to streamline, improve, and optimize any and every aspect of their organization.

What sets this system apart from everything else is its fusion of waste-reducing methods from Lean Manufacturing combined with the product defect-reducing methods of Six Sigma.

While you may know what Lean Six Sigma is, it’s sometimes hard to understand what it will look like once you implement it.

In today’s post, we’ll help you understand what Lean Six Sigma looks like in practice by describing 8 of its most powerful tools

But before we do that, we’ll give you some context for the system by walking you through Lean Manufacturing and Six Sigma separately, and then define Lean Six Sigma itself.

What is Lean?

Lean Manufacturing is a system for maximizing product value for the customer while minimizing waste without sacrificing productivity.

Lean manufacturing as we know it today has its roots in the Toyota Production System (TPS), but before it was known as TPS, they simply called it just-in-time manufacturing.

There were 3 things the Toyota Production System attempted to prevent:

1. Muda – Everything in your manufacturing process that creates waste or causes constraints on creating a valuable product.

2. Mura – Everything that creates inconsistent and inefficient work flows.

3. Muri – All tasks or loads that put too much stress on your employees or machines.

In Muda, there are 8 wastes you should work to eliminate:

1. Defects

2. Overproduction

3. Waiting

4. Not utilizing talent

5. Transportation

6. Inventory excess

7. Motion waste

8. Excess processing

There were also 5 principles that every Lean manufacturing system adhered to:

1. Value – A company delivers the most valuable product to the customer.

2. Value Stream – Map out the steps and processes required to manufacture those valuable products.

3. Flow – Undergo the process of ensuring all of your value-adding steps flow smoothly without interruptions, delays, or bottlenecks.

4. Pull – Products are built on a “just-in-time” basis so that materials aren’t stockpiled and customers receive their orders within weeks, instead of months.

5. Perfection – Make Lean thinking and process improvement a core part of your company culture.

What is Six Sigma?

Six Sigma is a data-driven process that seeks to reduce product defects down to 3.4 defective parts per million, or 99.99966{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} defect-free products over the long-term.

In other words, the goal is to produce nearly perfect products for your customers.

By using statistical models, Six Sigma practitioners will methodically improve and enhance a company’s manufacturing process until they reach the level of Six Sigma.

In all Six Sigma projects, there are 2 main methods of achieving the same defect-free goals. Below, we detail these 2 methods.

The first and most-used method in Six Sigma is a 5-step process called DMAIC:

1. Define

2. Measure

3. Analyze

4. Improve

5. Control

The DMAIC process uses data and measured objectives to create a cycle of continuous improvement in your manufacturing methods.

While DMAIC is useful for improving your current processes, DMADV is used to develop a new process, product, or service.

DMADV stands for:

1. Define

2. Measure

3. Analyze

4. Design

5. Verify

The DMADV process uses data and thorough analyses to help you create an efficient process or develop a high-quality product or service.

At their core, Lean and Six Sigma both seek to optimize the manufacturing process in order to provide the highest quality products to their customers. They simply use different methods and focus on different activities.

These differences complement one another, which brings us to the merging of these two methods into Lean Six Sigma.

What Is Lean Six Sigma?

Lean Six Sigma is the fusion of Lean Manufacturing with Six Sigma to create a complete system that removes waste and reduces process variation for streamlined manufacturing and optimal product output.

Lean Six Sigma primarily uses Six Sigma processes and methods as the backbone of the system – such as DMAIC and the belt system – to drive focused improvements in manufacturing while incorporating many techniques and tools from Lean to reduce wasteful steps and processes

To help you understand the specific processes and techniques Lean Six Sigma uses to improve your manufacturing, here are some of the main tools you’ll implement if your company adopts the Lean Six Sigma system.

What are the Tools of Lean Six Sigma?

The 5 Whys

The 5 Whys is a tool used to determine the root cause of problems within your organization. It’s often deployed as part of the Analyze phase in DMAIC.

The 5 Whys works like this:

– Write down the problem you’re having so everyone on your team can focus on it specifically.

– Ask why the problem occurred.

– If your first answer isn’t the root cause of the problem, ask why again.

– Repeat this step at least 5 times to find the true root cause of the problem.

You can ask why more than 5 times, but it seems that after 5 whys are asked, you will have clarity on the cause of your problem.

The 5S System

The 5S system is a method of organizing your workplace materials for quicker access and better maintenance. This system is essential for eliminating waste that is produced by poor workstations and tools in poor condition.

The 5 S’s are:

1. Seiri (Sort) – Remove all unnecessary items for your current production, leaving only what is necessary.

2. Seiton (Set In Order) – Organize remaining items and label them accordingly.

3. Seiso (Shine) – Clean and inspect your work area and everything in it every day.

4. Seiketsu (Standardize) – Write out your standards for the Sort, Set In Order, and Shine steps above.

5. Shitsuke (Sustain) – Apply the standards you’ve set for your company and make them habits for everyone in your organization.

Value Stream Mapping

Another tool used in the Analyze phase of DMAIC as well as in Lean Manufacturing – making it perfect for Lean Six Sigma – is value stream mapping.

A value stream map shows the flow of materials and information in one of your processes and was developed to help you improve and optimize flow throughout your organization.

There are 3 things value stream mapping helps you identify:

1. Value-enabling activities

2. Value-adding activities

3. Non-value adding activities

The whole purpose of this map is to eliminate all of your non-value adding activities and eliminate wait times between consecutive steps in your processes so that your processes become more compact, precise, and swift.

Regression Analysis

A regression analysis is a statistical process for estimating and understanding the relationship between variables.

You would use it to define the mathematical relationship between an output variable (y) and any number of input variables (x1, x2, etc.)

Graphing these inputs and outputs helps you visualize patterns or deviance from desired patterns in your workflow.

Be cautious when performing a regression analysis, though, if you want to avoid statistical illusions. Here are a few things to remember when performing a regression analysis:

When two variables are found to be correlated, it is tempting to assume that this shows that one variable causes the other, resulting in the logical fallacy known as correlation does not imply causation.
Two or more variables in your regression model could be highly correlated, making it difficult to isolate their individual effects on the dependent variable, referred to as Multicollinearity.
When the error term in one time period is positively correlated with the error term in the previous time period, you’ll encounter the problem of (positive first-order) autocorrelation.

Pareto Chart

The Pareto chart graphically displays the differences between groups of data, allowing Lean Six Sigma teams to identify the largest issues facing the process.

The y-axis represents a cumulative percentage and a defect frequency, while the x-axis represents the groups of response variables displayed as bars, such as machine design or machine parts.

This chart is often lauded as one of the most important tools in the Lean Six Sigma toolbox for helping teams uncover the 20{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of sources that cause 80{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of problems in their processes.

FMEA

Failure Modes and Effects Analysis (FMEA) helps businesses identify and eliminate weak points in the early stages of any product or process.

Developed in the 1950s, FMEA is used to review components, assemblies, and subsystems to identify failure modes and their causes and effects.

Lean Six Sigma practitioners use FMEA to improve the quality of their processes, services, and products by detecting and fixing problems before they occur.

Kaizen (Continuous Improvement)

Kaizen is the practice of continually observing, identifying, and implementing incremental improvements in the manufacturing process.

It encourages all managers and employees to be involved in the process of manufacturing improvements.

Kaizen ensures that waste will be gradually reduced through the collective talents and knowledge of everyone in the company working together to change the smallest inefficiencies daily.

Poka-yoke (Mistake Proofing)

Poka-yoke is a Japanese term that means mistake proofing. It’s a process by which employees work to identify and eliminate the causes of human errors throughout the manufacture and production processes.

For example, a poka-yoke could be changing the phrasing on machine buttons to eliminate worker confusion or it could be adding a safety brake to mobile equipment to prevent accidents.

How Do You Implement Lean Six Sigma?

If Lean Six Sigma sounds like the right fit for your organization, we suggest checking out these resources to learn more about the methodology and how you can get trained and certified to use it.

If you want to start improving areas of your business outside of manufacturing or production, you can check out our posts on creating a successful stocktaking process, reducing your costs of inventory, and optimizing your rate of inventory turnover.

And if you want to make it easy to automate and manage your inventory processes, we’ll give you a free trial of our cloud-based inventory management system.

Start your free 14-day trial today

New Release 25-Feb-2018

Posted on February 25, 2018 by dearsyst

New Improvements to DEAR

What’s new?

You can now estimate shipping rates in DEAR Inventory & B2B portal. The regions and countries that you ship to are known as shipping zones within DEAR which need to be manually configured in reference books. Each shipping zone includes shipping rates that apply to customers whose addresses are within that zone.

Direct Gift cards support introduced in DEAR, POS & B2B will support gift cards in the next release.

New Gift Cards sale template has been added in document templates, it can be printed from all sales modules.

A new notification has been added to the notifications module when gift cards are sold.

New notifications added:
– Sale order discount more than (X) or (X)% (calculated based on total compared with Quantity * Discounted price on product price tier, even if discount field is 0)
– Sale order line discount more than (X) or (X)% (calculated based on total compared with Quantity * Discounted price on product price tier, even if discount field is 0)
– Sale order has been created
– New recurring invoice has been issued
– Shipment tracking number has been changed
– New gift card has been sold

For sale notifications, new target email recipient option was added: Send to Sales Rep

Supplier Deposits feature introduced

Export to ShipStation has been improved to include Sales Representative field taken from sale as Custom Field 2

Ability to show serial numbers or batch numbers comma separated in a receiving note

Undo option added for sale manual journals

Improved onboarding design and experience

4 Tips on How to Effectively Plan a Warehouse Layout Design

Posted on January 19, 2018 by dearsyst

The layout of your warehouse is the foundation of the efficiency (or lack thereof) in your operations.

From inventory management to order fulfillment, your warehouse layout design will either streamline your business processes or slow them down.

If you need help planning your warehouse layout design, we’ll show you 3 principles of an efficient warehouse layout and 4 tips for getting it done right.

By the end, you’ll have a better understanding of what you’ll need to do to design a functional and effective warehouse.

3 Principles of an Efficient Warehouse Layout

Before you start designing your warehouse, you should understand what you’re trying to achieve with your warehouse layout design.

Here are 3 major principles to keep in mind when planning your warehouse:

Flow

Warehouse flow can be summarized as the uninterrupted movement of materials, people, and traffic within your building.

Your first goal should be to cut down on any areas of high traffic or potential for cross-flow crashes.

So, each activity that an employee performs must be located as close as possible to the activity that precedes it and proceeds from it.

That also means materials used to perform those activities should be situated as close as possible to each workstation.

Your second goal should be to eliminate as much movement and disruption as possible.

Accessibility

Every product and all products on pallets should be accessible by everyone, usually without the need to move one product to get to another.

That means structuring your pallet racks in rows that are wide enough to accommodate pallet jacks and trucks, and stacking and stocking items strategically for minimal interference with one another.

Space

Consider how to maximize the space you can afford, taking into consideration storage, stock, offices, working areas, empty pallet storage, battery charging, etc.

With a wide variety of vertical racks and freestanding equipment, you should be able to design your warehouse in the way you need it initially, while being flexible enough to change it in the future if desired.

4 Tips on How to Plan a Warehouse Layout Design

Now that you know the basics of what your warehouse needs to achieve, here are a few tips on how to achieve it.

Define Your Objectives

Defining your objectives begins with the principles we outlined above and is carried forward by the specific goals your particular business needs to achieve within your specific industry.

Each business will have different objectives for their warehouse.

Some businesses want to optimize their inventory receiving, while others need more efficient pick and pack processes, and others will design their warehouses for crossdocking.

Regardless of your objectives, make sure that your warehouse design helps you achieve them.

Determine Your Warehouse Inventory Needs

After defining your objectives, you should immediately determine your inventory and storage needs. You need to plan for the amount of stock you intend to store, how big or small that stock will be, where the stock will arrive and where it will depart, etc.

What you’re storing will dictate what you need to store it. This will also inform your aisle space, pallet rack height, and other equipment you’ll need to handle your inventory.

Create an Implementation Plan

Detail all the steps required to create your warehouse layout design.

Group tasks according to projects, i.e. building pallet racks is one project, while buying pallet racking materials is one step within that project.

Allocate appropriate resources to each task and project in your plan.

After you create your plan, double-check everything, especially the time it will take to implement your plan.

Test Your Warehouse Layout Design

Right before you start installing things like pallet racks or shelves or equipment, you should walk your warehouse to make sure it’s ready for everything to be installed.

Use masking tape to outline major work areas and carry things through it, roll pallet jacks around, and get other employees to simulate work at the same time.

This will give you a visual understanding of your space and if it’s optimized or not. Any errors here will result in worse errors later.

What To Do After Warehouse Layout Planning

There are 2 things you should do after warehouse layout planning:

Implement your plan
Invest in an inventory management system

The first point is obvious.

We’ll explain the second point.

A well-designed warehouse will help you move everything efficiently.

But it won’t help you avoid stockouts or obsolete inventory.

A well-laid out warehouse may help you with lead time reduction, but it won’t help you with inventory reduction.

If you’d like to do less stocktaking and more selling, then you need a cloud-based inventory management system.

You can find one right here at DEAR Inventory.

Start your free 14-day trial today

New Release 14-Jan-2018 – Notifications Centre, API Version 2, B2B, POS & more !

Posted on January 16, 2018 by dearsyst

New Improvements to DEAR

What’s new?

Notifications Centre:

Users are now able to get an overview of all notifications stemming from various sources (B2B, e-commerce, in-app sales) to help them become aware of critical real-time information. Documentation on how to setup notifications in DEAR please see here.

API Version 2:

We have added to the List of available endpoints:
– Product Family
– All reference book endpoints
– Assembly
– Disassembly

New API documentation can be found here.

B2B Portal:

You can now bind your own custom domain to your B2B portal. Steps on how to do this can be found here.

Option for customer of B2B portal to email order/invoice from B2B portal to have a record other than just in DEAR.

Send email notification to customer when order has been shipped with link to the invoice for downloading.

Send email notification to supplier when the invoice has been viewed/downloaded.

Email notifications when customer opens and downloads invoice.

DEAR POS:

New report added – Payment Summary Report.

Vantiv & Tyro payment service integration completed and is now available for use with DEAR POS.

DEAR Inventory:

You can now create coupons within the Product Deals module. Coupons can be issued to customers as part of sales promotions.

Pros and Cons of Dropshipping: Here’s What You Need to Know

Posted on January 13, 2018 by dearsyst

Do you want to start an ecommerce business with low overhead and no warehouse and still make a profit?

Then dropshipping is the business model you’re looking for.

But starting a dropshipping business isn’t the right choice for every entrepreneur. There are significant tradeoffs between dropshipping and traditional wholesaling.

We’ll look at the pros and cons of dropshipping and help you make the right choice for your business today.

What Is Dropshipping and How Does It Work?

Dropshipping is a business model that allows you to sell and ship products you don’t own and don’t stock.

Your suppliers – wholesalers or manufacturers – produce the goods, warehouse them, and ship them to your customers for you.

The process is simple:

– You receive an order

– You forward the order to your supplier

– Your supplier fulfills the order

While dropshipping has many benefits, it also has many drawbacks. We’ll explore both in the sections below.

What Are the Pros and Cons of Dropshipping

Many people start a dropshipping business because they think it’ll be easy to run.

“No inventory, no problem!” they say.

The truth is, it’s not “easy.” It comes with its own set of problems.

With that said, dropshipping also solves many problems for retailers and wholesalers.

Let’s take a look at the pros and cons of dropshipping to see if it will solve your business problems or if it will add to them.

Pros of Dropshipping

1. Low Startup Costs

It requires a lot of capital to stock a warehouse. You can eliminate the risk of going into debt to start your business by using dropshipping.

Instead of purchasing an extensive inventory and hoping that it sells, you can start a dropshipping business with zero inventory and immediately start making money.

2. Low Cost of inventory

The cost of inventory is one of the highest costs you’ll have if you own and warehouse stock.

You may end up with obsolete inventory – forcing you to find ways to reduce your stock – or you’ll end up with too little inventory – leading to stockouts and lost revenue.

Dropshipping allows you to avoid these issues and focus on growing your customer base and building your brand.

3. Low Order Fulfillment Costs

Order fulfillment usually requires you to warehouse, organize, track, label, pick and pack, and ship your stock.

Dropshipping lets a 3rd party take care of all of that.

Your only job in this arrangement is to make sure they get your customer orders. Everything else will be handled by them.

4. Sell and Test More Products with Less Risk

Without the constraints of a physical inventory and the costs associated with it, dropshipping allows you to update your inventory quickly, easily, and cheaply.

If you know a product is doing well for another retailer or reseller, you can immediately offer it to your customers without waiting for it to arrive in your warehouse.

Dropshipping allows you to test new items without the risk of carrying obsolete inventory. You only pay for what you sell.

Cons of Dropshipping

1. Less Control Over Order Fulfillment and Lead Times

Even though you don’t carry the cost of warehousing stock, you will pay for dissatisfied customers.

The manufacturers and wholesalers you do business with are responsible for managing and shipping your stock. If they screw up, the customer complains to you or buys from your competitor.

If you start a dropshipping business, make sure you work with high-quality partners.

2. Reliance on Other People’s Stock

Being able to offer new products immediately or stop selling slow-moving products is a major benefit of dropshipping.

The drawback to this perk is that you don’t control your supplier’s inventory. If they run out of stock, YOU run out of stock.

This will result in longer lead times and lost customers.

3. Less Profit

The hidden “cost” of dropshipping is the lack of bulk pricing.

You will likely pay more for each item you sell as compared to paying less for a large inventory of items – leading to less profit.

If you want to earn a lot of money using dropshipping, then you’ll have to sell more products than you otherwise would have if you owned and warehoused them yourself.

4. Poorer Customer Service

If your supplier delivers products late, damages them, delivers the wrong items, or otherwise screws up your customer’s order, the customer will take it out on you.

We already mentioned this problem when it comes to order fulfillment and lead times. But it extends farther than that.

You won’t be able to maintain the personal touch that retailers who manage their own inventory can provide customers. You won’t be able to quickly solve customer issues without overseeing the inventory yourself – you’ll have to deal with your suppliers to solve problems for your customers.

This “man-in-the-middle” way of helping your customers can lead to issues with your suppliers who may take a long time to do what you ask them to do, and with your customers – who will quickly get tired of waiting a long time for their problems to be solved.

Here’s What You Need to Make Dropshipping Easier

Now that you know the pros and cons of dropshipping, it’s important for you to know about a tool that you can use to make dropshipping work better for you.

We mentioned that one of the cons of dropshipping is not being in control of the inventory you’re selling – leading to potential stockouts.

But, you can use a cloud-based inventory management software that integrates with your supplier’s software so that both of you know how much inventory is in stock at any time.

This helps you as a dropshipper synchronize your marketing and sales campaigns with your supplier’s stock.

So, when any of your supplier’s customers make a sale (including you), it will update the amount of inventory in your supplier’s warehouse automatically.

If you want to minimize some of the issues with dropshipping and make it more worthwhile, then you need an inventory management system that tracks your stock levels in real-time.

Where will you find such a system?

Right here at DEAR.

Start your free 14-day trial today

New Release 17-Dec-2017 – B2B, Woocommerce & DEAR Inventory !

Posted on December 18, 2017 by dearsyst

B2B Portal –

Mass invitations to B2B portal. You can now export invitation links to CSV file and include in 3^rd party email campaign applications.
Ship to different company added as an option in delivery details during checkout.
Added [ContactEmail] mail merge field to the B2B portal invitation email so when a customer receives the invitation and chooses a password they will also know which email they will need to use when signing in.
Highlight “New” products using tags. In portal setup page indicate a “tag name for NEW products” which you would like to use to flag as new on your portal. Add this tag to all your new products or product family’s in product setup page.
You now can add extra info to the log-in page screen, you can use this section to explain to a customer for example how to apply for an account or how to log in etc.
There is now an option to set Minimum Order Quantity’s per SKU.
There is now an option to customise your shopping cart Icon.

Woocommerce –

Woo integration has been updated to be compatible with their API V2. The old legacy API V3 will no longer be supported. Main changes relate to the way we now deal with Woo tax rules. The old legacy API V3 method used ‘’tax classes’’ assigned to products i.e standard, reduced rate & zero rated. The new tax calculation logic is now more flexible. You can now choose to calculate tax based on country, municipality, and state. To handle this complexity, you can use Woo’s automatic tax settings which will then be mapped to tax rules within DEAR.

DEAR Inventory –

During stocktake if “Zero Stock on Hand Option” is used and a product is selected from drop down or scanned, average cost is automatically prefilled into the unit cost section.
Barcode scanning logic reworked in the Stocktaking module to handle a large quantity of scanned items efficiently.

Minimum Order Quantity: What It Is and How to Make It Work for You

Posted on December 16, 2017 by dearsyst

A minimum order quantity is often seen as a necessary evil in wholesaling, retailing, and manufacturing.

Some businesses like it, some businesses hate it, and some businesses have to use it.

But what is a minimum order quantity exactly? What are its benefits for suppliers? And how do buyers effectively deal with it?

Read on to answer all of these questions and learn how suppliers can use minimum order quantities to their advantage and how buyers can make it worth their time.

What Is a Minimum Order Quantity?

A minimum order quantity (MOQ) is the lowest set amount of stock that a supplier is willing to sell. If you can’t purchase the MOQ of a specific product, then the supplier won’t sell it to you.

All MOQs vary, depending on the product.

High-ticket items that cost more to produce will usually have a lower MOQ than low-ticket items that are easy and cheap to produce.

If you’re a buyer, we’ll show you how to navigate MOQs later in this post.

If you’re a supplier, let’s look at what its benefits are to your business.

What Are the Benefits of MOQ’s for Wholesale Suppliers?

The purpose of minimum order quantities is to allow suppliers to increase their profits while getting rid of more inventory more quickly and weeding out the “bargain shoppers” simultaneously.

A minimum order quantity is set based on your total cost of inventory and any other expenses you have to pay before reaping any profit – which means MOQs help wholesalers stay profitable and maintain a healthy cash flow.

Wholesalers don’t always prefer this way of doing business, but in many cases, wholesalers are forced to sell using MOQs because they’re forced to buy a minimum of stock from the manufacturer.

Here’s an example of how to use MOQs in your business:

Let’s say you sell golf balls. For retail customers who are buying in small quantities, you sell one pack of golf balls for $10.

If you want to sell wholesale, then you should reduce your price just enough to make it a good deal for the buyer, while allowing you to make a larger profit and quickly reduce your inventory at the same time – like golf ball packs for $5 a piece with an MOQ of 100 packs.

The goal is to attract a small amount of buyers who purchase the largest amount of your stock.

How Do You Deal With MOQ’s If You’re a Buyer?

Since you know minimum order quantities are often used by wholesalers to find the best buyers and stay profitable, you can attempt to present yourself as their ideal client while negotiating lower prices or looking for the deal that is the most mutually beneficial.

Here are a few tips for dealing with MOQs and making them worthwhile:

1. Negotiate a Lower Price

If you want to make MOQs worth it, then you should start by attempting to negotiate a lower price.

The supplier may not be able to lower the price, but you’ll never know if you don’t ask.

If you develop a good relationship with a supplier, or it’s a slow time of year for them, or if they’ve overstocked their shelves, you’ll have a better chance at persuading a supplier to lower their prices.

But if the supplier is in high-demand with loyal customers, it’ll be difficult to get a deal. In that situation, if you want the product bad enough but don’t want the full minimum quantity, your best course of action would be to pay more to receive less.

2. Buy From Legitimate Wholesale Markets Online

B2B marketplaces like Alibaba or Wholesale Central help you source products from a large variety of suppliers, allowing you to easily compare prices and deals to find the one that matches your needs.

The caveat to online marketplaces is that you should still vet the suppliers you want to buy from, even if the marketplace initially vetted them.

The best part about B2B marketplaces is that you can usually find more low or non-existent MOQs online than you could otherwise.

3. Buy From a Trader

Trading companies can place one order for multiple buyers. This means you can meet the supplier’s minimum order requirement without paying full price and without taking the full inventory.

This lowers the price of the MOQ for all buyers involved and reduces the impact of holding more inventory than you need.

Beyond Minimum Order Quantities

Minimum order quantities are just one tool out of many that suppliers can use to optimize their business.

If you’re selling online wholesale, you should enforce MOQs, but you should also try reducing your shopping cart abandonment or choose the right selling environment when deciding between Amazon Seller Central vs Vendor Central.

Similarly, MOQs are just one of many hurdles that buyers have to overcome.

If you’re buying MOQs, than you should carefully consider your reorder point and rate of inventory turnover.

But If you’re a buyer or a seller, there’s one tool you both should be using:

A cloud-based inventory management system.

This will allow you to know how much you need to sell or buy in real-time, provide accurate forecasts for future demand, and enable easier stocktaking for streamlined productivity.

If you’re sick of Excel inventory management and are looking for a better option, you just found it.

Start your free 14-day trial today

New Release 10-Dec-2017 – B2B & POS Enhancements !

Posted on December 12, 2017 by dearsyst

The following changes were rolled out over the weekend:

B2B Portal –

‘Back’ & ‘Checkout’ buttons added to product info pages to streamline the customer experience. The text of these buttons is customizable.
We have added the ability to show short description under product heading on the Product Info pages.
The appearance of additional attributes is now optional on the portal.
Invitations tab in the B2B integration page now shows all invited clients including date invitation was sent and status of the invite.
Status “ACCEPTED” has been added in invitations tab on customer page to know the customer received the invite and accepted On the Invitation page of the B2B integration page the status will be shown as “ACTIVE” when invite is received and accepted.
You can now use product attributes and tags in search function.
You can choose to hide prices on screen. Users can switch off/on price information without affecting other users.
We have added an option to export order list from B2B portal for a specified period.
Product favorites can now be added by customers to allow them to save most used products and provide quick access for reordering.
Button added in checkout to delete some or all out of stock items from the cart. Please note this option will only be available if Allow Backorder function is enabled & ‘Show Available Quantity’ option is set to either ‘Show Quantity’ or ‘Show In/Out of Stock’.
We have added an option to show/hide orders created for a customer outside the B2B portal.
Product availability can now be shown in price list. In the B2B portal integration setup enable option “Include Available Quantity in Price List “.

POS –

Opening cash float can now be entered upon opening register.
Register closure report can now print cash operations.

Please Note: The receipt template has been updated therefore you will need to reset your template if you have customized it previously. Please contact support@dearsystems.com if you require assistance with restoring your receipt template.

New Release 26-Nov-2017 – Deprecating Locations, Publishing to eBay & new on-boarding experience !

Posted on November 26, 2017 by dearsyst

Locations can now be deprecated – This will allow locations to be deprecated rather than deleted; locations with transactional data associated with them cannot be deleted and previously had no option for them to be removed from the system. The deprecated status can only be assigned to a location if it has no allocated/on hand/on order stock quantities.

Products can now be published to eBay directly from DEAR – Please see documentation here

User Onboarding – There have been some updates made to the user onboarding experience. This will only affect newly created accounts.

DEMO Company – You can now try out DEAR’s new features by creating a DEMO company. The DEMO company gives you access to all features and contains fictional data which is completely seperate from any other organisation you might already have as a paid subscriber. Please keep in mind that you can never convert a DEMO account to a paid subscription & the data you enter into the DEMO account will expire after 14 days.

General Changes – eCommerce sale channels

The changes listed below are applicable to all e-commerce integrations except Shopify, but are currently only visible with Amazon & eBay.

The changes mainly relate to the sale channel’s catalog, its management and its use by internal processes.

Reason for changes: The link between the product in DEAR and the product listed on a Sale channel can now be changed. This solves the problem of the case where the user has several integrations where the same products are sold, but with different SKUs.

Settings
There are 3 new options.
1. Match product (by SKU / Manually)
2. Create new product if not found by SKU (Yes / No)
3. Use Sale Channel as Master for DEAR products (Yes / No)

The first option allows you to specify how the mapping will be done in the catalog between the product listed on a Sale Channel and DEAR. The existing product will be searched for automatically by SKU, and if a product is found with a matching SKU, then the mapping is done automatically. In the case of a completely manual mapping, the user will have to choose the appropriate DEAR product SKU the Sale Channel product relates to. Please note that automatic mapping does not exclude the possibility of changing the mapping manually later. The second option is only available when “Match product by SKU” is enabled. The reason for second option is if for example there is a product (SKU) in the Sale channel that does not yet exist in DEAR, then this product can be automatically built in DEAR based on the data received about the product from a Sale channel. The possibility of a manual build is still always there through the DEAR UI. The third option is worth paying special attention to, since it has been a frequent user request. If the third option is enabled, if a product has been changed or updated in a sale channel, the linked product in DEAR will be changed to match upon catalog download. Product changes in DEAR can include changed price, name, weight, length, pictures, and other data (except SKU) based on the product data downloaded from a Sale Channel.

Catalog
Now several listed products on a Sale Channel can be linked to a single product in DEAR. However, when a single variation is sold on the sale channel, this will trigger quantity update for all linked listings within the Sale Channel. There is a special column now for manual mapping of products and families. There are only three options:

● Leave blank (do not tie to a product in DEAR)
● Link to an existing product
● Create a new product in DEAR (available if the product with the required SKU does not exist).

On the catalog tab there is also an option that allows you to switch the appearance of the catalog to “Show variations separately”. If checked off, all products without variations are displayed, and each product variation is shown as a separate product line. If this function is not enabled, products without variations are displayed and product families are displayed as a single product line. The product statuses in the catalog have also undergone some refinement, now three statuses are possible: “Not Listed”, “Listed”, “Canceled”. The ‘’Canceled” status appears for products that were removed from a Sale Channel. By default, they are not visible in the catalog, to see them you need to remove the “tick” from the “Show only active” checkbox.

Description of changes in internal processes

Downloading Catalog

Consider a catalog which contains 3 products: A, B, C. Product C has been modified in the sale channel. Next time a Catalog Download is triggered, the products: A, B, D will be visible with the following statuses:

Products A and B (the unchanged products) will remain in the catalog with a Listed status. Product D will now appear in the catalog with a Listed status, but product C’s status will change to Canceled. This process now allows us to prevent the treatment of a deleted product as Additional Charges when loading Sales from a sales channel. Instead it will just be treated as a normal stock item. Product mapping must be completed in order for sales to be successfully downloaded from your sales channels to DEAR. When sales are loaded from a sale channel and a sale contains a product that is not mapped to any product in DEAR, then this sale will be not be downloaded. However if user enabled “Match product by SKU” and/or “Create new DEAR Product” options, then DEAR will try match an unmapped product automatically or create a new product if one is not found. The user will be notified if a sale is skipped through internal messages such as: notifications, recordings in operation log, or text message on the screen (depending on the situation). Operation log and notifications – these are the first places to check if something like this does occur.

10 Inventory Management Best Practices for Improving Your Business

Posted on November 11, 2017 by dearsyst

Are you managing your inventory as effectively as possible?

It’s OK if you’re not.

Most businesses have plenty of areas to improve, especially in their warehouses.

But if you don’t begin the process of upgrading and streamlining your business operations now, you’ll easily slip into bad habits, inefficient practices, and a high cost of inventory.

By following inventory management best practices, you’ll run and manage an efficient and effective business and warehouse year after year.

Inventory Management Best Practices

There are many industry-specific inventory management best practices you can follow, but there are also a few general practices that every business can benefit from.

Here are 10 inventory methods and practices that will help you optimize your warehouse processes.

1. Categorize Your Inventory Using ABC Analysis

ABC analysis is a technique for arranging your inventory into a hierarchy of most important to least important items.

Here’s what an ABC analysis would look like in practice:

– A-items are the best-selling, highest priority stock and require regular reordering and constant quality review

– B-items are valuable, medium-priority stock and usually require monthly reordering

– C-items are low-priority stock and are typically carried in high volumes with minimal reordering

Organizing your stock within your warehouse according to how they sell and how much value they bring your business will help you optimize storage space and streamline order fulfillment.

2. Optimize Your Pick and Pack Process

The pick and pack process is a set of procedures and tools that your employees use to fulfill customer orders quickly and efficiently.

Types of pick and pack processes:

– Discrete order picking

– Batch picking

– Wave picking

– Zone picking

Here are 5 ways to optimize the pick and pack process for effective inventory management:

1. Design your warehouse for efficiency by placing your top-selling items nearest the packing station

2. Keep your warehouse well-organized by cleaning every area and removing clutter

3. Implement and program a warehouse management system (WMS) so that the items picked are listed in the order the picker will find them.

4. Double check each order for accurate counting

5. Use barcodes or RFIDs on every piece of inventory for easy counting

3. Establish Your Inventory KPIs

Inventory KPIs measure your performance in a particular area over a specific amount of time toward a certain goal.

They help to eliminate guesswork by giving you clear milestones to hit every week, quarter, or year.

With them, you’ll have the data you need to make smart, strategic decisions for your business.

Here are 6 inventory KPIs you should focus on:

1. Inventory carrying costs

2. Inventory write-off and inventory write-down

3. Rate of inventory turnover

4. Cycle Time

5. Order Status and Tracking

6. Fill Rate

4. Use Batch Tracking

Batch tracking is sometimes referred to as lot tracking, and it’s a process for efficiently tracing goods along the distribution chain using batch numbers.

A “batch” refers to a particular set of goods that were produced together and which used the same materials.

Use an automatic batch tracking system in order to enter information about all the products within your batch – keeping that information at your fingertips if you need to access it quickly, as in the case of a product recall.

5. Use an Accurate Reorder Point Formula

A reorder point formula tells you approximately when you should order more stock – when you’ve reached the lowest amount of inventory you can sustain before you need more.

You can stop being a victim to market spikes and slumps by using a proven, mathematical equation to help you consistently order the right amount of stock each month.

This equation is called a reorder point formula.

Here’s a reorder point formula you can use today:

(Average Daily Unit Sales x Average Lead Time in Days) + Safety Stock = Reorder Point.

6. Carry Safety Stock Inventory

Safety stock inventory is a small, surplus amount of inventory you keep on hand to guard against variability in market demand and lead times.

Without safety stock inventory you could experience:

– Loss of revenue

– Lost customers

– And a loss in market share

What makes safety stock a critical inventory management best practice is that you’ll reap all these benefits by using it:

– Protection against unexpected spikes in demand

– Prevention of stockouts

– Compensation for inaccurate market forecasts

– A buffer for longer-than-expected lead times

7. Optimize Your Inventory Turnover Rates

The rate of inventory turnover is a measurement of the number of times your inventory is sold or used in a given time period, usually per year.

By calculating your rate of inventory turnover, you’ll have a better grasp on the market demand for your products, on the amount of obsolete stock you may be carrying, and what steps you need to take to sell or stock more inventory – depending on your turnover rate.

Here’s a simple formula for calculating your inventory turnover rate:

Cost of Goods Sold (COGS) divided by Average Inventory.

Here are 4 ways to increase your rate of inventory turnover:

1. Experiment with pricing

2. Liquidate obsolete stock

3. Forecast Customer Demand

4. Redistribute your inventory to other warehouses

8. Streamline Your Stocktake

Streamlining your stocktaking process – the steps you take to count inventory – will help you mitigate the possibility of your staff making costly mistakes.

A well-structured stocktaking process will include all the steps required to keep your staff working efficiently to uncover discrepancies and inaccuracies while keeping them engaged and focused.

Here are a couple of ways to streamline your stocktake:

– Schedule your stocktakes to reduce impact on business operations

– Clean and organize your stockroom before performing your stocktake

– Know what stock you’re counting and how you’re counting it

– Open and count absolutely everything – no guesswork allowed

9. Reduce Your Inventory

Most businesses have 20-40{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} of their working capital tied up in inventory – so if you’re closer to the 40{cb377218d5687e54e8ee9149518f87201a393a7c1db5e8076e9d750029ec0dc3} end, it’s probably time to create an inventory reduction strategy.

The goal is to find your inventory sweet spot – where you have the lowest possible inventory levels without being understocked – in order to maximize growth and profitability for your business.

Here are 3 inventory reduction methods you can follow:

1. Lower lead times by tracking your existing lead times, sharing sales data with your suppliers, and reducing minimum order quantities (MOQs)

2. Eliminate obsolete inventory by reworking or modifying your stock, offering a discount, or dating it for a tax write-off

3. Improve inventory forecasting through real-time tracking and reporting, integrated communication, and large volume inventory management tools

10. Use a Cloud-Based Inventory Management System

One of the best business-changing decisions you can make is to stop using Excel inventory management and start using cloud-based inventory management.

Unlike locally-installed applications, Cloud-based inventory management software allows you to pay for the features you need now and seamlessly upgrade when you need to in the future.

You’ll pay a single, predictable subscription fee for a “package” that best suits your particular feature needs and team size; then, upgrading is just a few clicks away when your business growth justifies a more powerful platform.

On top of stress-free upgrades, cloud software companies work in the background to make sure things continue to run smoothly, and should you need any questions answered or breaks fixed, they’ll have a support team standing by to assist you.

A Bonus Inventory Management Best Practice

Point #10 above is not just a best practice…

It’s the one tool that brings all the other best practices together.

From streamlining your stocktake to optimizing your inventory turnover rates to batch tracking – a cloud-based inventory management software will help you improve every area of your business operations.

At least, that’s what our software will do for your business.

If you’re looking for a robust inventory management solution to upgrade and optimize your inventory processes, you just found it.

Start your free 14-day trial today