7 Steps Toward Improved Inventory Management
Transport delays, currency gyrations, supplier and manufacturing problems and faulty sales forecasting are among the many challenges organizations face in efficiently managing their inventory. This post will identify seven “pain points” that if properly addressed and solved, will streamline your supply chain and optimize inventory management.
- Replenishment policies: this is critical in maintaining adequate stock levels. We strongly recommend that you regularly inspect your warehouse layout and workflow and inventory setup before establishing replenishment policies to ensure that everything – from your infrastructure to our processes – is fully optimized.
- Tracking inventory turnover: in order to get a more precise handle on the number of times your inventory cycles or turns over, you need to get a “holistic” view of your supply chain, including replenishment levels, order fulfillment performance and the degree to which your bin locations are optimized.
- Evaluating supplier performance: use accounting and purchasing data to assess supplier performance, quality and pricing. A business intelligence tool will let you create queries to evaluate your suppliers in spotting trends and identifying areas to increase profitability.
- Real time quality measures: check quality as goods are delivered and have in place a system that tracks whether items are approved or rejected; create policies that automate whether they should be returned or fixed.
- Tracking costs: miscalculating or underestimating your cost of sales will negatively affect profitability. Knowing your true cost of sales allows you to set prices that align with your profitability targets.
- Knowing the buying habits of your customers: accounts receivable and sales order data enable you to profile your target customers and improve your ability to predict buying trends, which has a direct bearing on inventory levels.
- Monitoring the sales channel: there are a number of issues that can disrupt your sales channel and pipeline, which makes it imperative that you’re able to detect problems or troubling trends as soon as possible in order to take immediate action without surrendering your market share.
Addressing any one of these seven “pain points” will go a long way toward optimizing your supply chain and improving the way you manage your inventory. Indeed, a more flexible and robust inventory management solution with advanced business management capabilities will enable you to incorporate all of these and realize the benefits of deeper insight into your infrastructure, processes, policies and customers. To dig deeper on this topic browse our available resources on Warehouse Management and Inventory optimization strategies.
Great post. I would add an additional step that provides forecasted demand based on historical trends. Relying solely on the projections of the sales team often leads to excess inventory.
Awesome one for inventory management thanks for sharing this valuable content.Good work keep this on