Innovative technologies have made their mark on every aspect of manufacturing, retail and eCommerce business, from product design through to after sale service. When deciding where to prioritise budget spend for greatest return on investment, companies have difficult decisions to make and while inventory control continues to be fundamentally impacted by innovation, it is often overlooked when the time comes to allocate funds.
Understanding the significance of readily available raw materials, work-in-progress and finished goods should help decision-makers see that investing time and money into modern inventory solutions is critical to operational success and customer service delivery.
When inventory control is approached as a cashflow measure, the financial impact of excess stock, slow-moving SKUs, stock-outs and obsolete or dead stock, provides a new perspective. Too much inventory stock means capital is tied up unnecessarily and inventory shortages mean process delays, low productivity, missed sales opportunities and unhappy customers.
Following are just five of the reasons you should be investing in modern inventory solutions to achieve optimum inventory control.
Champions modern assembly needs
Advanced inventory control plays an important role for manufacturers managing large volumes of highly configured, personalised products. Operational tactics, such as hub and spoke design and distribution, allows manufacturers to utilise modular design concepts and mix and match components. The different systems of a product can be assembled and stored, with final assembly only taking place once an order is received. The customised finishes, accessories and details are then added per the customer’s unique specifications.
This modular design tactic is becoming increasingly common as manufacturers seek to meet customer demand for specialised and customised products. Modern inventory solutions help manufacturers manage this system of storing and staging partially assembled products, components and compatible add-ons.
Real time inventory
Online inventory management provides real-time inventory control with up-to-the-minute inventory data, providing a complete picture of what’s happening in your organisation and enabling you to react quickly to supply chain needs. Modern inventory solutions provide real-time information that records every transaction, from new stock purchases to outgoing sales and order shipments.
Updating your stock levels instantly lets you know what, where and how much inventory stock you have at any given time. Helping to improve the overall speed and efficiency of your service.
Modern inventory solutions and online inventory management can also be used in the warehouse to improve inventory tracking that helps to reduce errors and speed up your pick and pack processes. Barcodes scanners, RFID technology and sensors with GPS tracking can all be used to help warehouse staff quickly find and pick products from shelves.
For manufacturers with hundreds or even thousands of SKUs, multiple possible versions and kitting requirements, saving time on each order will quickly add up to a significant cost savings. Online inventory management also improves accuracy which leads to increased customer satisfaction because orders can be tracked from the time they were placed, until the goods are delivered to the end-user.
Greater reporting accuracy
A significant benefit of modern inventory solutions is that it allows companies to have the right amount of stock in the right place at the right time. Predictive analytics give managers the confidence to tighten inventory levels, reduce safety stocks and promote ‘just in time’ strategies to optimises space, time and cash flow, ensuring capital is not tied up unnecessarily.
The accuracy in financial reporting is greatly improved because accurate calculations of inventory product volume, enable the immediate and accurate listing of inventory value for end-of-month accounting, quarterly and annual financial reporting. This is important because an incorrect ending inventory can impact many of your business and its profitability.
One of the best ways to improve cashflow and profitability is through inventory control. Read more about the relationship between them.
Modern inventory solutions help you to manage sales, orders and inventory, integrating with other eCommerce platforms, simplifying administrative processes by syncing data between all platforms into one central place.
Make manual entry account is a thing of the past with online inventory management software that integrates with accounting software such as Xero. A modern system adds an accounting entry automatically whenever a transaction occurs, managing separate sales locations and multiple payments.
Additionally, automatic supplier orders mean you can automatically refill inventory stock through your online inventory management software. When stock of a given product reaches a predetermined threshold, a new order will be automatically placed with your supplier. Barcode integration then allows you to track product movements in the warehouse more easily, reducing the risk of theft, human error and end of the year inventory discrepancies.
A robust, modern inventory management system can integrate with all areas of your business and will improve both your cashflow and customer relationships. So what reasons do you have for not implementing modern inventory management?
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Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.