Getting your inventory management strategies working in harmony can be a daunting – but far from impossible – task. The key is recognizing what strategies best suit your business needs and having the tools to implement them effectively and efficiently. If you’re a small business looking to take the leap, or a start-up wanting to get the basics right, there are some critical strategies to consider. These also apply for established businesses that are looking to streamline operations or just make sure their inventory management is being handled in the best way. We’ve put together 9 critical strategies that will help you implement, improve, and get the most out of inventory management.
Pick an inventory management platform
With so many inventory management software options available, it’s important to pick the one that provides the best solutions for your business. The easiest way to accurate and streamlined inventory management is through a platform that integrates with an apps ecosystem. The more your systems work in sync with each other, the better your overall control and ability to forecast. Look for software that offers integration with accounting, eCommerce and point-of-sale systems.
SaaS cloud applications
The ability to use multiple devices without software installations, and to access real-time data from anywhere in the world, make SaaS (Software as a Service) cloud platforms a fantastic solution for inventory management. There is also the bonus of diminished IT costs, particularly helpful for small businesses and start-ups.
Not the easiest thing to achieve, inventory optimization is about making sure that just the right amount of inventory is stocked in the right places at the right time. The use of a good inventory management platform is essential as this provides the control and the data analytics necessary for intuitive and accurate inventory optimization.
Access to real-time inventory data and analytics helps put you on course to have accurate product and sales forecasting at your fingertips. The ability to see the big picture of your inventory, as well as make adjustments to the finer details, is now an essential characteristic of industry leaders. The benefits of this can be seen in the efficiency and overall profitability of your business. Businesses now realize the more access to data they have, the more success they can achieve.
Individual supply and demand plans
One area that can yield great benefits is supply and demand plans for your products and stock. Regardless of how complex your supply chain network is, there are some basic techniques that provide great overall solutions. Two areas to research and consider are how to manage your safety stock levels, and your individual supply and demand plans. Businesses with complex and varied inventories are starting to develop individual supply and demand plans for each product, instead of using broad groupings. This gives far more control over each item, and provides great opportunities for accurate sales forecasting and lean inventory practices.
Use suppliers that best suit your business
The suppliers you use are an essential part of your production or restocking equation. It pays to keep track of their performance, and to make adjustments when needed. If your orders are not on time, or often arrive incomplete, then it is your business that ultimately suffers. Many vendors will offer solutions to cater to your specific needs if asked. In this regard, as the old saying goes: the squeaky wheel gets the grease.
Make use of mobile technology
Mobile technology has provided a whole new level of flexibility to inventory management in recent years. As the technology and management platforms have advanced, more and more intuitive control is enabled. Again, the use of a SaaS platform is usually best. Mobile devices can help both cut down on human error and labor, as well as ensure that inventory data is accurate. For a complete solution, look for software that links and syncs to all of your business management solutions.
Use a perpetual inventory management system with lean inventory practices
Lean inventory management techniques ultimately enable you to reduce the waste involved with using, storing and holding inventory. It is a set of principles or systems that help diminish the negative effects of aging, spoilage, over or under-stocking, inefficient transport management, and untimely ordering, to name a few. As there are a variety of techniques available, it‘s helpful to research which lean practices will most help your business.
Because it is an area that can yield fantastic rewards when done well, some companies hire a specialized contractor to assess their inventory operations and instigate lean techniques that best suit that business. Smaller businesses can make use of the tools available by utilizing management platforms that offer ongoing support with best practice solutions. In most cases, the use of a perpetual inventory system will offer the best features for lean inventory management.
On that note, perpetual inventory management systems are becoming better, more accessible and more user-friendly. They make the job of tracking your inventory, even across multiple locations, easy and efficient. Making use of one goes a long way towards providing an overall solution to all your inventory management needs.
Utilize slotting and warehouse management
There’s a wealth of information available on how to best set up and manage your warehouses. One area that is commonly emphasized is layout and product slotting. Placing your most popular products or items closer to hand will save you time and minimize the chance of stock-outs. Some businesses make sure items that are often used, sold or shipped together are next to each other when stored. If you’re a new business, take the time to set up your warehouse space in a way that makes sense for what your business does. The time spent at the start will make all the difference later. Ease and efficiency of operations yields huge rewards for all businesses large or small.
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.