Inventory management is a critical part of supply chain management. It is vital for long-term profitability to get it right, yet so many businesses get it wrong. Below are some useful tips to streamline your inventory management system.
Use real-time data
Today’s software allows businesses to go beyond spreadsheet-type methods and synchronise operations to get information in real time. This makes for better management decisions as they are based on timely, accurate data; and for faster response to problems and opportunities. It is worthwhile exploring a possible investment in this technology if you haven’t already.
Invest in a good printer
This is a simple but fundamental tip. As modern inventory management systems rely on barcodes, if these are difficult for employees to scan, then the whole system will fall down as a result. Spending a bit more money on a printer that creates clear labels that will endure in a warehouse environment is an excellent investment. (Of course you could also investigate upgrading to barcode scanning technology).
Make use of mobile technology
Modern inventory management software can sync to mobile devices, which has allowed a much greater flexibility in managing inventory in recent years. Mobile devices allow more intuitive control over inventory, and they also tend to cut down both labour costs and human error. Yes, the Unleashed mobile app will be released soon!
Find the best forecast model
If your inventory management system involves forecasting required inventory levels, then think critically about the model you use. Many people think that complicated forecasting methods will do a better job, but the problem with these models is that they have not been tested in real world situations, and can often be outperformed by simpler models. If you have multiple sources of forecast data that you are confident in (e.g. your own forecast from historical data, and forecasts from your customer), then you will likely benefit from using multiple models that use these different data sets, and taking an average of these.
Choose the best supplier for your business
It is obvious that choosing the right supplier is important, but it is vital to have a strategy to achieve this. Take some time to conduct necessary research to find what supplier will work best. Once you have chosen a supplier or suppliers, make clear to them what is important to you (e.g. lead time!), and monitor their performance regularly. If you are not being supplied on time, or shipments arrive incomplete, your business will suffer.
Engage in some micromanaging
Recognise that many factors in the inventory management sphere such as specific inventory items and suppliers are different, and need to be treated accordingly. Individual items will have differing demand as well as costs and valuation methods. Not all vendors are alike either. Managers should be aware of which suppliers are more reliable, which items tend to be received in better condition, and how to treat expected receipt dates versus actual receipt dates. An inventory management system will recognise these differences, and be able to track this information so that adjustments can be made to the business’s practice in these areas.