Inventory Management

How fast things get out of control! My little business doesn't seem that complicated, but once I started looking at it I realized that I needed help tracking my inventory. Excel wouldn't be good enough for very long.

Here's what makes it so complicated...
There are four types of inventory - yarn, cloth, supplies, and finished merchandise. When I weave cloth, yarn is consumed. When I sew merchandise, cloth and other supplies like lining and notions are consumed. This makes for a tangle of tracking and a lot of number crunching if I want to stay on top of it.

Then, there's the complication of tracking finished merchandise. This week I'll be putting a lot of stuff in Annie's Ren Faire booth. I'll be making more merchandise while I'm down there and putting it in the booth, too. At the end of the show, much of my stuff will be staying with Annie to sell in other shows. When I return home, I'll be putting things on Etsy, Artfire, and my personal website. Each of them will have a separate storage container in my physical inventory to keep me from accidentally selling the same item twice. I'll also have a little retail area in my studio so visitors can buy the things they're watching me produce.

So far I'm up to forty products: four styles of bag in ten colors. Tracking them as they move through two inventory locations and five sales channels is no small task. There's a whole class of software specifically developed to handle these things. It's called MRP, which stands for Manufacturing Requirement Planning or Material Resource Planning. Every commercial system that is powerful enough for my needs is very expensive, so I turned to open source. There's a system called "Open For Business", ofbiz for short. I've used it in the past when I needed to manage inventory for a small essential oil business.

Before I describe it, I need to warn you that it is not like most other software. It's web-based, running its own java server code and requiring its own back-end database engine. It comes with a java database called Derby. It's too slow and undependable for a production environment, so I switched to MySQL, which is also free. If you're comfortable editing configuration files and poring over pages of source code when an error strikes, this might be the system for you!

Once I got ofbiz installed and configured, here's what it lets me do:
- Enter orders for inventory items, tracking the arrival of each order into inventory and allowing for partial shipments and damaged items.
- Define my own beam configurations, and tell it how many pounds of each color of yarn go onto the beam for each warp design. When I wind a beam, it updates the inventory to add a beam and remove the yarn that got consumed.
- Define cloth styles, which use part of a beam and some amount of weft thread per yard. When I weave the cloth, it consumes part of a beam and some weft thread, keeping the inventory up to date.
- Define merchandise, each style using a particular cloth. Some items also require lining material as well. When I make the items, it consumes the right amount of cloth, lining, and notions from the inventory.
- Transfer inventory to other locations like Annie's booth, or into containers for various online sales channels.
- Reconcile the projected and actual inventory, noting the specifics of any variance - date, reason, etc.
- Sell things from specific inventory locations, removing them entirely. That *is* the point of all this!

And that's all I need for now. At any time I can tell how much yarn, cloth, supplies, and merchandise I have in any of several inventory locations. If I've initiated a stock transfer, but haven't packed it up yet, it tells me that some of the "quantity on hand" is not "available to promise", making it even more dependable than a visual scan at determining how much I really have to sell.

I'm glad that I got this all set up before I gave myself a chance to lose stuff in the chaos of my first production crunch and my first big show. It's one less source of uncertainty and stress. It took many hours to set up, requires 15 minutes of data entry every day that I make lots of different products, and is completely worth it for the peace of mind that it brings.