Even the most diligent firms can take steps to streamline and improve the overall efficiency of their inventory management function. Particularly in competitive markets, businesses should look to innovative solutions to retain an edge. Inventory is one of your most important assets. Here are some useful ways in which to streamline its management.
Invest in technology
Even the smallest business should automate the more laborious and resource intensive aspects of their inventory management. Large, successful enterprises are trimming already tight margins, and slimming inventory costs by outsourcing as much labour as possible to machines and using software tools to speed up functions for which staff are still required.
One particularly dreaded inventory task is the stocktake (for those businesses using periodic inventory systems). Barcode scanners, RFID tags and inventory management software can significantly reduce the lost time, staff cost and stress associated with a stocktake.
Businesses can also benefit from investment in inventory technology by delegating some oversight and planning responsibilities to software. Food and grocery retailers, for example, need to closely monitor best before and expiry dates. Getting a date wrong on a whiteboard or a spreadsheet can be the difference between profit and loss. Smart inventory software can run daily reports on inventory age and expiry, identifying inventory at risk of becoming stale and minimising deep discounting to clear aging stock. Many inventory platforms will send alerts to the relevant manager’s email or phone.
Insist on always-on, always-accurate inventory management data
A modern, best in class inventory management platform will enable you to move past periodic stocktakes, intricate spreadsheet systems and the sharing of inventory data over email attachments. Perpetually updating inventory data (often with barcodes and RFID tags) means that you will always know what stock is on hand. Because you have more frequent and less seasonal data, you will also be in a better position to understand the dynamics of your inventory right across the year.
Keep cost in context
The actual cost of a business’ inventory is highly variable with many moving parts. To efficiently manage inventory spending, it is crucial to get a handle on the cost of your stock. Highly dynamic prices, foreign exchange rates, shipping tariffs and a range of less visible costs are all relevant. Streamlining inventory management involves having a system in place (such as inventory management software) that allows you to see cost in context and to understand the drivers behind changes in cost and profit.
Know your suppliers
It is essential to keep up with your suppliers. Do you have adequate systems in place to know exactly when your next order is due, whether it has been shipped, and if problems or delays are likely to arise? Keep track of issues so you can better manage (and possibly even pre-empt) supplier issues. Do not stick with a supplier out of inertia; make sure you regularly benchmark supplier performance against other suppliers.