Tag Archives: financial analytics

Improving Stock Tracking with SIMMS 2013

simms_stock management

Quite often, stock items that are brought into the warehouse or stock room get conveniently put wherever there is room for them — in a drawer or bin, on the corner of a shelf, under a bench beside an established location, into a bin with other items whose packaging looks similar, and so forth. Inventory that is missing or misplaced must become a situation of the past. You need a stable and versatile stock recording system to do what your company needs and a dedicated individual (or department) that will be responsible and have full control and understanding of the stock system you have implemented.

SIMMS 2013 Inventory Management software lets its users do their jobs, whether they use a data collector on their belt, a wireless laptop tucked under their arm or a desktop computer functioning at the receiving desk. SIMMS will help your business optimize your control of your stock with accuracy and accountability with every item traceable to not only its supplier but also to who received and warehoused it. SIMMS is precise without being imposing or all-consuming.

Electronic data interchange (EDI) and bar code scanning help you to eliminate data entry errors. A system of “cycle counting” – wherein a few items a day are physically counted and their totals are compared to their recorded to the actual count. Highest-selling – and highest-priced items – should be counted more often. SIMMS can help you achieve these goals, and can also aid your efforts to counteract the following challenges:

  • Blocked aisles
  • Damaged equipment
  • Damaged inventory
  • General clutter and disorder
  • Inability to ship on time
  • Inaccurate inventory
  • Lost inventory
  • Low morale
  • Low productivity
  • Shipping errors
  • Work injuries

For more information on how SIMMS 2013 can help you add more precision and control to your stock management, visit www.simmssoftware.com or email sales@kcsi.ca.

Backflushing of Stock


“We finished 5 bicycles. Deduct ten tires from the stockroom inventory.”

In many companies that manufacture goods for future sale, when the production is posted against the operation, the process is known as backflushing. The operator will generally enter the production order number, operation, quantity good, scrap quantity, and labor and machine information and then issue all the materials as one transaction just as would usually be done in the pre-production phase. One often uses the option to change particular item quantities and add particular scrap quantities. When you have your issuing program working in the background without the manufacturing department ever seeing its contents, such is known as blind backflushing.

Some advantages of backflushing are:

  • When you use bulk materials like sheet goods or dry goods, bar stock or roll stock, often exact quantities cannot be picked.
  • When using point-of-use materials, post-production issuing simplifies the issuing process by making it easier to conduct counts on your point-of-use materials. If you pre-production issued these materials, the system counts would have to be reconciliation with any orders having quantities issued but not yet consumed. One pointer is that if you post-production issue, after each post-production posting you need a system-to-actual-count match.
  • When scrap content is usual in the finished item and you finally have a good quantity approximate to the ordered quantity, you find this post-production issuing simplifies the issuing process because you will not be aware of how many you run until production is complete.

Backflushing is just a method for issuing materials that works well when applied properly and poorly when applied improperly. Processes that do not employ point-of-use materials, bulk materials, or those where production scrap does not encourage an increase in run quantities find no advantage from backflushing. The concept involved is similar to the reversal of the flow of materials to drive contaminants from a filtering device, such as are what is performed at a water treatment plant, where water that is filtered through sand (to remove impurities) will have its flow reversed through the sand to force any contaminants to where they can easily be removed. In any production process, sometimes applying the backflushing concept can reveal wastage and unnecessary steps in the process that can be left out of future production runs, thus saving time, materials and labor.

The Buildup Chart


One of the great tools in inventory analysis is the Buildup Chart. It uses the recognized x-y coordinate chart, and on it you plot cost build-ups over time (usually organized by product group) with Cost on the vertical “y” axis and Time on the horizontal “x” axis.

Most often, costs of raw materials accumulate first over time, soon to be followed by labor and overhead costs. In the design you must allow for safety stock, lot size inventory, transit stock, defects/rework/scrap, and finished goods and distribution pipeline stocking. It ultimately also reveals the affect of consignment arrangements. Various analysts also treat accounts receivable as a type of de facto inventory, until it is paid for.

Once the chart is completed, show it around for shock value. Created correctly, it will cause much thought about the effect of constraints and decisions on inventory. It will help inventory managers realize where the weaknesses in the current stock management system and will help devise the changes that need to be made.

Two examples of how Buildup Charts can indicate areas to be improved are as follows:

– One company had a 14-month buildup curve, which was reduced to 4 months.

– Another company discovered that the longest lead time material item accounted for only 20% of the product cost, so stocking only that item — instead of finished goods or instead of only reacting to orders — enabled them to radically reduce the response time for orders by 70%. It also added the flexibility of being able to use that raw material to make a number of different end items.

SIMMS 2013 Inventory Management software has a wide variety of analytic tools to help you gain the most important information about how many aspects of your business are doing. Visit www.simmssoftware.com or email sales@kcsi.ca to learn more.

Cash Flow and Inventory

Water tap dripping dollar bills, Water waste concept

Cash that you have to spend before you can get paid is known as working capital. It is used for inventory and funding your operation. Many companies, if not most, borrow to support their short-term cash needs. If they do not manage cash well, they can run out and the bank may not be willing to lend more. One enormous drain on a company is inventory stock. Reduce inventory stock and you increase the amount of available cash for running your business. It takes cash to buy or build the inventory you are going to sell. If you have no cash, then you have no way to pay suppliers or to make payroll. This seemingly bottomless hole is something businesses must avoid.

Stock levels not only affect the flow of cash, but also affect profits. Each dollar gained in reducing inventory will lead to a dollar’s worth of working capital needed before you have to borrow needed funds from elsewhere. Borrowing less means lower interest rates that you have to pay as well. One might conclude – and quite accurately, too – that every dollar you reduce your stock holding by, two dollars in profit is made.

Demand must drive stock management with the goal being “dollar focus”. This goal is required in order for buyers and planners will make more effective choices and working first on the most important part numbers. The stock that brings the largest dollar counts must be watched closely so that adjustments can be made quickly.

Buyers’ and planners’ primary concerns are to manage stock dollars and then increase the “performance” of the inventory. Focal points are inventory dollars, order quantities and safety stocks – all of which must be in step with current demand. Whatever tools are used, businesses must master both their management of stock levels and operating capital.

Purchasers and policy planners need to decrease stock and increase the margin of cash for running the company. A useful reminder to business leaders is that far more businesses fail due to a lack of cash than from a lack of profits.

Inventory Turnover and SIMMS 2013


The investment of any business’ success relies on their inventory. Inventory turnover is a ratio showing how many times a company’s inventory is sold and replaced over a set period of time. If your inventory is perishable goods then your goal is to have a higher (faster) inventory turnover rate. The importance of high inventory turnover is relied upon to generate revenue AND produce satisfied customers.

Inventory turnover is a crucial detail of management efficiency. It is a measure of how often, during a course of a year, a company sells and replaces its inventory of component parts, materials and final products. As a general rule, the higher the inventory turnover rate the better it is for the business. Management must be sure to monitor all products, and guarantee that all unsalable products are pulled from the shelves.

Inventory is listed as a current asset on the balance sheet, and therefore your inventory’s valuation can directly affect your current asset value and your overall total asset balance. The increased fill rate of an item develops a well-managed inventory list, and a well-maintained items list must be monitored carefully to avoid shortages of frequently used items and/or “stock-out” situations for any goods in your system.

SIMMS 2013 Inventory Management software has every tool you need to maintain your company’s utter control of stock items, and analyze how each item is doing in regard to turnover and ultimate profitability. Visit www.simmssoftware.com or email sales@kcsi.ca for more information.

The Stock Aging Report


A good stock management system should include a Stock Aging Report to help you keep on top of the flow-through ratios in sales of your items.

This report enables you to view all your stock items, the stock turnover and age, and the average age of the stock. You should be able to filter the available criteria to display only certain items in the stock aging report, such as only purchase or sales units, or stock with certain statuses or attributes.

The report also must provide information on items in stock for different aging periods. Aging periods should be able to be selected based on inward dates or manufacturing dates. You also need the stock values in the report shows cost price, dealer price of retail price.

Based upon the usage of stock, you can plan the adjustment of the procurements of slower moving materials in terms of their frequencies, quantities and particular reasons that they do not move faster through the system. Cost reductions are to be sought, slow movers can be sold through special promotions to avoid their expiration or obsolescence, and certain slow stock may be re-used in some other package or can be traded for items that move more quickly through the system.

The calculations of the average days to stock, average inventory, costs and inventory turnover are as follows:

Average Days to Stock

365 days
Inventory turnover ratio

Average Inventory

Period 1 + Period 2 + … + Period 12


Inventory Turnover

Cost of Goods Sold
Average Inventory

Only a comprehensive stock and accounting management system can provide you with the Stock Again Report and before you invest in a package that combines your inventory and financial analysis tools, you must be certain that the necessary analytical tools are included. SIMMS 2013 provides you with everything you will need to assess your current situation and apply the necessary fixes. Visit www.simmssoftware.com or email sales@kcsi.ca today to find out more about how SIMMS will suits you and serve you in equal measures.

SIMMS 2012 Banking Features

With  SIMMS 2012 Inventory Management software can reconcile cash, credit cards, and checking information, manage bank accounts and deposits and transferal of funds smoothly and easily. Accounting requirements can be a challenge to those who are not trained accountants, but SIMMS makes those structured and necessary steps easy to create, edit and manage using intuitive and easy-to-understand screens.

Whether it is in the management of the user’s various accounts, or the tracking of balances due and payment history from customers or to vendors, their details are easily entered or amended within the program. This seamless combination of top-level stock management and leading-edge accounting practices make SIMMS 2012’s banking features the best choice available today.

While other software packages require users to master complex accounting procedures and manually implement them, SIMMS has been created using the input of accountants, whose suggestions and focus on the most important information have contributed to the easy and practical steps included in the initial setup of SIMMS. This way, none of the most important settings are missed and none of the data requested during the setup is left as something confusing to the user. Addition of secondary data takes place during the secondary steps of setup, enabling SIMMS users to realize which information is the most important.

Visit www.simmssoftware.com or email sales@kcsi.ca for more information.

Improving Your Gross Profit Margin

Profit is the vital factor in every company — it opens many avenues of expansion and contributes to the solution of almost all problems. SIMMS 2012 Inventory Management software helps you manage your profits by revealing your business’ gross profit margin.

A company’s gross profit margin is an assessment its efficiency in securing overall profit once the expenses of the cost of goods sold have been deducted. A higher GPM is more encouraging for the company — and any investors — in regard to its future earning potential. The control of overhead (including rent or mortgages, utilities, etc.) is crucial to a company trying to improve its GPM. The formula for its calculation is as follows:

GPM = Gross Profit ÷ Total Revenue

For illustration purposes, let’s calculate the gross profit margin of Company One based on numbers from its income statement:

$180,000.00 gross profit ÷ $420,000.00 total revenue = 0.42

Therefore, the gross profit margin for Company One is 42%, which is very good.

Several areas in which a company can improve its GMP are as follows:

1) Reduction of Administration Costs – management personnel overhead is the concern here. Again, the work done versus the expense to achieve the work is the ratio to be used here.

2) Reduction of Cost of Sales – there are expenses related to the sales of products or services, and can be reduced by selection of a less expensive labor force or purchase of less expensive materials.

3) Reduction of Debt – this can be done through finding and employing lower interest charges and any other structured financial advantages that can be achieved.

4) Reduction of Development and Research expenses – this should be rolled back to its level of return efficiency. Many businesses accept expenses here in the belief that speculation works best, but it should be based on returns from each separate project and its revenue generating potential.

5) Reduction of Effects of Depreciating Stock – Newer, more reliable items must be purchased and older pieces must be converted in any way possible to a minimum of what was spent to acquire them.

6) Reduction of Marketing Expenses – either a lowering or discontinuation of aspects currently employed toward advertising.

Visit www.simmssoftware.com or contact KCSI by email at sales@kcsi.ca to discover more about how SIMMS 2012 Inventory Management software can help you achieve your profit margin goals.

Letting SIMMS 2012 Help Your Business

SIMMS 2012 Inventory Management software provides you with an endless supply of important analytical data to apply towards policy changes and improvements in your business. A wide selection of reports, fully customizable, and program screens that make your life easier are only two of the advantages you gain. Adjusting prices, changing manufacturers or vendors, deciding on package sales of select stock items — all should be easy steps, and with SIMMS, they are easy. Accounting standards, or personalized adjustments, may be desired at any moment. A few mouse licks later in SIMMS, your changes have been applied.

Tracking of holding costs, item turnover, expiration horizons for stock, best sellers, depreciation rates, most common pieces for repair, assembly overhead, manufacturer lot history — all these details need to be coordinated and kept up-to-date. Warehousemen, department heads, managers, bookkeepers and sales staff all need complete and comprehensive data to optimize the chances the company will be putting its best commercial foot forward.

In software other than SIMMS, information is compiled from a database, selecting data and wringing them through old world formulas. SIMMS 2012, however, uses its built-in customizable reports to pull exactly the information you are requesting. Your best habit of thinking differently can provide you the best data, and only you truly know your industry and your business; therefore, your software should be awaiting your needs. SIMMS does.

Learn more about SIMMS at www.simmssoftware.com or email sales@kcsi.ca today.


Bump Up Your Profits with SIMMS 2012

With SIMMS 2012 Inventory Software, you can choose the start-to-finish business management applications you want from a completely inclusive and integrated suite of manufacturing, inventory and accounting modules. SIMMS provides great potenttial expansion and customization, along with customer relationship management (CRM), E-Commerce, payroll, and stock solutions in both a local or hosted (online) version.

Here are some other benefits that SIMMS offers:

  • Stock limit notification: When a sales person attempts to sell an out-of-stock item, they are prompted with a choice to backorder or to override the alert provided they have permissions to do this.  Otherwise the user can always select from a list of alternative items to offer the customer; this enables the sales person to salvage a sale that would have normally been lost due to the item being out of stock.
  • POS at your service: Boost your sales by using the SIMMS Point of Sale (POS) module.  This module gives you the cash register/till management functionality you need to out-distance the competition.
  • Drop shipping:  Easily process orders and have them drop-shipped directly to your customers.
  • Reduce double entry: High-end functionality, such as creation of sales orders and purchase orders in a single session, saves you resources and personnel.

To learn more about how SIMMS 2012 can improve your bottom line, take a look at www.simmssoftware.com or email sales@kcsi.ca for more information.