A Basic Guide to Streamlining your Inventory Management

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Have you ever wondered if there must be a better way to controlling and managing your inventory? Inventory management is something that can be constantly improved to reach a more efficient outcome for the company, and streamlining the processes in inventory management are key to achieving efficient inventory control.


As with anything, from filling your car up with petrol to self-checkout at the supermarket, automation leads to timesaving and efficiency. Likewise, if an automated system is implemented for inventory management, then time and subsequently money can be saved. It is imperative to adopt a good automated system that is designed for the required purpose. If it is not, and results in issues, then the whole endeavor can be counter-productive in terms of timesaving. A consequent bonus of automation is that human error is reduced; particularly when this involves constantly updating stock levels from the customer purchase all the way back to the warehouse. Accurate stock levels can be updated and obtained easily with a perpetual inventory system.

Hardware and software – make wise choices

Once the company has decided to improve inventory management, the correct software needs to be chosen based on the needs of the company. Using correct software allows a company to do away with tools such as spreadsheets, which historically were widely used to store inventory data. A limitation of spreadsheets is that it is nigh impossible for accurate reports of real-time inventory data across the site to be generated, let alone for an accurate picture to be gained on correct stock levels required to avoid running out or overstocking items.

These shortcomings of spreadsheets mean stock is often over-ordered due to a one-size-fits-all solution being utilized, resulting in the storage of stock which cannot always be moved. Subsequently this ends up costing the company in storage and the associated risks and insurances. In conjunction with utilizing appropriate software, a company should consider the appropriate hardware needed to mobilize their inventory management. The use of iPads, tablets or smartphones can provide accurate real-time stock data to management personnel as well as to customers, resulting in timesaving and lean business operations.

Each to its own

With newly implemented inventory management software it is essential to develop an inventory management plan unique to each product and industry (e.g. hops reordering for breweries). These are also known as demand and supply plans, and are used to derive correct reordering levels, which ensure products are neither over-stocked nor on back-order, and thus inventory control is achieved. Obtaining accurate data on each product allows for lean ordering that streamlines the process, as well as increases the net profits by reducing the need to store unnecessary items not being sold.

Keep tabs on your suppliers

It is a good idea to learn how to use warehousing management systems that aid the control of supplies, such as when the supplier has shipped the inventory, when they are due to arrive and what is on backorder. Sometimes this link in the chain is forgotten about, however it is imperative to have a grasp on suppliers, as identifying weaknesses in supply can provide opportunity to improve the performance of current suppliers or replace them with more reliable and possibly cheaper sources.

Count all the costs

It is important with inventory control (of which the goal is leaner inventory management and maximization of profits) to understand all the costs in the process. These include things such as particular prices given to the customer including discounts and specials, the cost of quality control, costs of internal errors resulting in rework of product, and even failure costs where the error belongs to an external party such as a supplier. The reason why it is important to understand these costs is that operational decisions are made based on the face value of a service – yet if the hidden costs are not counted accurately, then the decision made actually costs the company more and subsequently reduces profit margins. Often a different decision is made when all the costs are counted, as the most economical option at first sight can often end up costing the company in other ways such as time or reputation.

An example of this is if the cheapest supplier is utilized, however a cost of them being so cheap is that they deliver late every time. With consistent late deliveries, the company then either increases the lead-time of the order to compensate for delays, or they over-stock the supplied item. Both of these scenarios are detrimental to lean inventory control, which can reduce the company’s profit margin and even compromise their reputation with customers.


There are a few aspects of inventory management highlighted in this article to streamline the processes and create a more comprehensive and lean picture of the company’s stock. The cornerstone of implementing lean inventory control is to understand inventory intrinsically, from supply all the way to storage and sales. To provide an accurate understanding, custom software programs are used and should certainly be considered to gain a firmer grip on inventory, which eventually can result in increased profits.

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Melanie - Unleashed Software

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.

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