If you have ever caught yourself asking why inventory management is so difficult, you are certainly not alone. Inventory management can give businesses a real headache and be viewed as overwhelmingly hard if not taken control of early on.
Major reasons why inventory management can be challenging is because it’s never-ending, complex and it takes time. This means inventory stock levels are constantly fluctuating as consumer demand keeps changing, so your inventory management system needs to be flexible enough to react quickly to changes.
The great news is inventory management doesn’t have to be a major grind. Here, we’ll take a look at how two approaches to controlling inventory stock may help achieve better inventory control in an easier way. Read on to find out how reactively controlling inventory stock and proactively controlling inventory stock could work for your business.
Reactively controlling inventory stock
Reactive approaches to inventory control are made when a business is responding to a particular problem at hand. It is an action that needs to happen now as a result of something going wrong. For example, despite it being summer there has been a peak in demand for umbrellas resulting in stock outs, the reactive approach here is to deal with this current issue by getting more umbrellas.
Reactively controlling inventory can also act as a troubleshooting method as the problem has already arisen, as opposed to preventative measures where the problem hasn’t arisen yet. This means reactively controlling inventory spends less time on preparing for hypothetical situations and more time resolving the issue at hand.
Proactive controlling inventory stock
A proactive approach to inventory control is when attention is focused on being prepared to manage potential inventory threats and opportunities. Inventory stock levels are planned with anticipation of what might happen, such as a new seasonal trend. This advance planning may lead to increased levels of safety stock to keep businesses prepared for delayed shipments or a further spike in demand. This buffer of stock can help alleviate stress in the event of such a delayed shipment occurring, as the goods will be available to meet customer expectations, increasing customer satisfaction.
Some businesses will look after their inventory in a reactive way, while others will take a relatively more proactive approach. Both of these approaches to controlling inventory stock can work for a business. Generally, no business will take on a single approach in its entirety, as they both are subject to pros and cons and each one has its place in different situations.
A good idea here is to look at your business’ efforts. If you are frequently experiencing crisis management circumstances, try looking at proactive ways of controlling inventory. Start with testing it on a few inventory items — you may find that a mix of the two approaches works best. Today, inventory management practices are just getting better and better. The secret is to find the best inventory management solution that works for your company.
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.