Effectively managing inventory is key to the success of any business, especially those with large and complex inventories. When a business is reasonably small, managing inventory may be a simple task of recording stock movements on paper. However, as a business grows and its inventory diversifies, inventory management can become more complex.
This is especially true of businesses where inventory is stored in multiple locations. Storing inventory across multiple locations and warehouses can make overseeing inventory very difficult. For this reason, many business owners choose to centralise their inventory — that is, to hold all inventory in a single location.
By centralising inventory, managers will have better oversight of the movements of stock, from new inventory orders to the outflow of customer deliveries.
What is centralised inventory?
In a nutshell, centralised inventory is when you keep stock in a single location. Businesses merge all their products into one place to make inventory management simpler.
The benefits of centralised inventory
There are many benefits to centralising your inventory, but most importantly, it can help to streamline your business processes. As Jacquie Young-Sterling, director of customer experience at Compliantia says, “Retailers that are strictly eCommerce or only have a single store have the most to gain from centralised inventory. Since they’re only packing and shipping, they have far fewer logistics to be concerned about when compared to a multi-unit retailer and can run their entire business from their warehouse.”
Centralising inventory can also help to prevent any stock level discrepancies. Companies with inventory in multiple locations have to ensure syncing between each warehouse, but centralising inventory removes this burden and leaves less room for error when it comes to stock taking, and this is particularly important for forecasting.
In addition, centralising your inventory will allow staff to work on the things that matter most, like customer service. As Young-Sterling says, “Having a centralised inventory for your business means you have a dedicated team tasked with receiving, fulfilling replenishment, and shipping orders carefully and cost-effectively. This means your internal team doesn’t have to put customer service, marketing, or on-site sales on hold to deal with products coming in or going out.”
Centralised inventory can also be cost-effective. By reducing your inventory to a single location, you automatically save on the costs of renting (or purchasing) and maintaining additional locations to store your inventory. Furthermore, since data is more accurate and operations are more efficient with centralised inventories, you can reduce the amount of time and resources required to complete specific tasks in your business like fulfilling orders or pulling inventory reports.
How can businesses centralise their inventory?
Once you’ve made the decision to centralise your inventory, it is a good idea to use inventory management software if you aren’t already. This will make the task of syncing inventory records more accurate and efficient and ensure the transition from multiple inventory locations to a singular location runs smoothly.Topics: inventory control, inventory management, multiple warehouses, stock control