Solar Companies: Inventory Management Just For You
Inventory Management for Solar Companies
Finale Inventory provides comprehensive inventory management for solar companies. Installers can accurately track serial numbers for solar panels or other equipment used in installation with our integrated barcode scanning capabilities. Our cloud-based inventory solution provides complete control over your warehouse to save you time conducting physical inventory and save you money on purchasing decisions.
Using software designed for inventory management allows you to tighten control of your stock. Inventory management is a critical balancing act for any business owner. If you have too little, your crew won’t have the supplies they need to complete installations. If you have too much, you’ll tie up cash in inventory that may lose value before you can install it. Finale Inventory can help you optimize your inventory levels to avoid stock-outs and overstocks.
Challenges of Inventory Management for Solar Companies
Having too much inventory in the solar industry is particularly dangerous due to the rapid pace of innovation. With each passing year, major advancements in solar panel technology improve their efficiency and energy storage capabilities. Other required equipment, such as batteries and inverters, are also becoming smarter and cheaper. As a result, outdated equipment will continue to depreciate in your warehouse, and it will be challenging to offload them, even with significant discounts. When it comes to solar energy, customers want only the latest technology.
Not having enough inventory can also cause issues if you stock out or do not have enough stock for multiple installations. Productivity will wane if your installation crews are delayed, waiting for critical components to complete the installation. An unhappy customer will add to your frustration and heighten the need for inventory management software to manage your products effectively.
Two specific obstacles to effective inventory management in the solar industry include:
1. Swings in Inventory Levels
Inventory management for solar companies can be more complicated than in other industries because of the many influences affecting customers’ purchasing decisions. Demand for solar panels changes dramatically based on external factors. Some are similar to many other sectors. The market naturally dips and increases based on electricity usage — when utility bills go up, more people want to switch to solar.
However, state, federal and international incentives can also shift market demands. Consumers and businesses invest in solar in droves during the months leading up to a rebate or incentive expiration date. They want to switch when they can get the highest government incentive, which can put a strain on your inventory if you don’t prepare for it. Here, the right software solution can make demand planning easier and more reliable.
2. Market Flow
The solar market is volatile, with a general trend toward price decreases. Solar products often experience periods of rapid devaluation. If you have unsold inventory in stock, these market conditions can mean you have to sell panels at a loss. This is less of a problem if you only buy equipment for your contracted jobs because you’ll sell them at an agreed-upon price. However, if you purchase inventory before selling it to customers, these dips in market value can cost you.
Benefits of Inventory Management for Solar Companies
Inventory management has the power to streamline everything from solar panel serial number checks to restocking. When you use software to improve your inventory management, you gain advantages such as:
1. Improved Communication
It’s easy to see where your inventory is and who moved it there with inventory management software. You can always follow up with the correct people when discrepancies arise. Meanwhile, automated alerts tell the right employees about inventory issues requiring their attention. You’ll be alerted when customer demands shift and when you need to reorder new products. Warehouse workers will receive notifications on their barcode scanners if they pick the wrong products for a shipment. Since these alerts occur automatically, less information gets lost due to communication issues.
2. Centralized Data
You may have inventory arriving from multiple suppliers at multiple warehouses. You likely also have different inventory on every work truck. Meanwhile, the individual solar panels and related products installed for customers need to be tracked by serial number. With all the different sources and destinations for your inventory, it’s easy for data to get siloed when you track stock by hand. Inventory management software keeps it all in one place, where everyone who needs the information can access it. You’ll improve billing, purchasing, accounting, warehouse management and job scheduling all at once.
3. Saved Money and Time
Finale Inventory uses your purchase orders, received shipments, sales orders and shipped or delivered orders to keep track of your inventory levels automatically. Instead of marking changes in your inventory manually through a spreadsheet, these changes happen in real time. You’ll have a reliable count of your current stock with less time spent manually updating records or counting inventory by hand, which saves you time and money.
By optimizing your stock levels, you can reduce your stock on hand to reduce storage and depreciation costs while always maintaining enough inventory to satisfy customers and keep up with your current sales. This will also save you money and help you avoid costly stock-outs.
4. Reorder Forecasting
Demand in the solar industry can change dramatically. Unpredictable electricity costs and changing government incentives can drive up the demand for solar panels during certain times of the year and send it back down during other times. As your sales velocity changes, you need a sophisticated system that can predict when you’ll need more inventory.
You don’t want to reorder too many panels, expecting an increase in demand when it is declining again. At the same time, when demand picks up, you need to reorder more frequently. You also need to factor in changes in supplier lead times, another common concern in the solar industry. Inventory management software can predict precisely when you need to reorder based on your desired level of safety stock, current sales velocity, supplier lead times and other data.
5. Barcode Scanning and Serial Number Tracking
It’s critical to track serial numbers for large, expensive equipment like solar panels. You’ll often need to look up a product’s repair history, which you can do by logging serial numbers with every repair job. You may also need to keep track of serial numbers in the case of a manufacturer recall.
Inventory management software with a barcode integration makes it easy to check solar serial numbers for the panels and other associated equipment. A crew member can scan a barcode with their phone upon installation and every repair visit, allowing your company to track serial numbers easily.
6. Multi-Location Support
As a solar company, you may have warehouses across the country, each holding a different amount of inventory. Many companies have to manage the complexity of maintaining stock at multiple locations. In the solar industry, the need to keep equipment on individual crew trucks further complicates inventory management. When a crew arrives for an installation or repair job, they need both the equipment specified for the job and a range of equipment to make unexpected repairs on the spot. By being prepared with inventory for a range of installation or repair needs, you can finish more jobs on a single trip.
To do this well, you need an inventory management system that allows you to track and move inventory across multiple locations. Software like Finale Inventory enables you to track inventory in many locations and sublocations so you can identify and replenish low stock, even on a truck-by-truck basis.
How Inventory Management Works
An inventory management solution can streamline many of your manual processes. Besides using indicators from your purchase orders and sales records to count your inventory in real time, it has many useful features to improve warehouse activities. Let’s talk more about some of the key tools that can streamline solar company operations and how they work.
Running out of stock is a sure way to hinder your growth, and Finale Inventory has several ways to create reorder points to let you know when products need to be ordered.
The simplest way to reorder inventory is with Finale’s “Min/Max” reordering, which you set up with two static numbers. The “Min” value is the low number that triggers a reorder for that item, and the “Max” value is the target high stock level after the reorder. This reordering method is ideal when product sales are more predictable and when a customer wants a simple configuration to assist with reordering. It can work well for some solar installation businesses with a firm handle on their sales predictions.
Since customer demand and supplier lead times can fluctuate quite a bit in the solar industry, more sophisticated restock forecasting may be necessary. With Finale Inventory’s advanced restock forecasting capability, customers can make dynamic purchasing decisions that go beyond setting Min/Max thresholds. Our software can calculate each product’s sales velocity using your sales data and use that data to establish a reorder point for each product in your warehouse.
Combined with your product’s historical sales data or current sales velocity, Finale Inventory will incorporate other inputs, including expected sales growth, desired safety stock and supplier lead time. This calculation gives you a reorder point that changes to compensate for current demand and your other inventory management needs.
The purchasing and replenishment capability will constantly keep track of your stock and alert you when product stock at a specific location goes below the threshold. With a couple of mouse clicks, Finale Inventory will automatically create a purchase order for your suppliers.
2. Tracking Serial Numbers of Solar Panels With a Barcode Scanner
Similar to most products with long lifespans and complex engineering, like automobiles, every home or commercial solar installation includes warranties. In this case, solar panels come with two separate warranties — one for the equipment and one for performance. The equipment warranty might guarantee the product for 10-12 years without failure. The performance warranty typically guarantees 90% of its energy production after 10 years and 80% after 25 years. As the installer, you might also offer your own workmanship warranty or a warranty for the rooftop installation.
To track the warranties for each solar panel in a home or commercial installation, every solar panel has a barcode printed or etched on the panel from the manufacturer. As an installer, you need records that are easily accessible. So, you must have an archive of every solar panel linked back to their installation date and project.
Finale Inventory’s serial number tracking allows you to easily track serial numbers on your products. We make it simple to trace an unlimited amount of serial numbers from the time of receiving to the installation of your products.
One could attempt to record the serial number by pen and paper for each installation. However, recording serial numbers manually is prone to human error. Workers have a high potential for oversight when recording long strings of serial numbers by hand. Each mistake can cause many issues when the serial numbers are used for warranty purposes.
Barcoding ensures every serial number is entered as written. Workers involved in recording solar serial numbers will not be able to forget or skip a number. You also won’t run into illegible handwriting or typos, helping your company automate data entry and maintain accuracy. Barcoding ultimately saves you time, energy and money.
Even the most meticulous workers will make mistakes recording serial numbers. Barcode inventory management eliminates human transcription altogether, keeping you one step ahead. Finale Inventory makes it manageable to track your products and keep up with these complex tasks. Our personalized support and implementation team can configure our software especially for inventory management for solar companies.
To record the serial number, you can simply scan the serial number on the solar panel with a barcode reader or barcode scanning app. From there, the data transfers to the cloud servers via WiFi or a USB cable. If you are at the installation site, you can also transmit the data via WiFi using a smartphone hotspot.
Once you store the data in the cloud, the software generates a comprehensive audit trail of stock changes and will accurately track each individual solar panel. Business owners can then run multiple reports to find an individual solar panel or see all the serial numbers used at a specific installation.
3. Multi-Warehouse Support
To service a large geographic region, many installers store the panels in multiple locations and warehouses and need robust solutions for inventory management. With a cloud-based interface, Finale Inventory enables a business owner to have complete inventory visibility for each warehouse location to ensure the business runs smoothly.
You’ll be able to break down your total inventory quantities by location without any wasted time. You can then streamline decision-making as you schedule shipments from your warehouses based on which ones have sufficient stock and the closest proximity to the customer.
With a cloud inventory management solution, every location will have a real-time view of stock changes made at any location. As your Pasadena warehouse ships out products, your Irvine warehouse will immediately see the changes.
Solar Company Inventory Management With Finale Inventory
At Finale Inventory, we’ve worked with warehouse managers and business owners across industries, including many in the solar energy sector. We understand that each business has unique workflows, inventory management systems and software integration needs. When we partner with a solar company, we pair the customer with a world-class, dedicated support specialist. Your support specialist can recognize your use cases and business workflows, train you in the software and help you configure it for the unique needs of the solar industry.
To learn how Finale Inventory can help your solar company with inventory management, start your free trial today!