In today’s competitive business environment, it’s important to have strategies in place that make the inventory management process as easy and efficient as possible. Detailed below are five ways to streamline your inventory management.
Invest in inventory management software
Some businesses prefer to manage their inventory manually ‘to keep things simple’. But it is important to note that manual systems tend to actually be very labor-intensive and prone to human error. You are better off investing in inventory management software that is able to track your inventory accurately and automate many of your business processes, allowing you to take the staff time out of inventory management and have it focused on other areas of the business.
A great way to streamlining your inventory management is to continuously look for ways to improving your supply chain processes. Identify what the strengths and weaknesses of your supply chain are and see what you can do to improve the problem areas. These solutions should not require large capital investments or major system overhauls, small incremental changes can make a positive difference over time. Never assume that you have done all the improvements that you can possibly do, as there will likely be new technologies and systems that make inventory management more efficient.
Reduce slow-moving, excess and obsolete inventory
Slow-moving inventory is a problem that many businesses have to face. It occupies space, consumes resources and gets in the way of more profitable items. All of which impact negatively on your cash flow. It can be a bottleneck to the productivity of your supply chain, as everyone is constantly worried about what to do with the slow-moving inventory, when these efforts should be focused on the more profitable items. So it may be necessary to discount or write off slow-moving inventory because if it continues to accumulate, it will only hurt your business in the long run.
Employ a vendor managed inventory (VMI) system
VMI is a system where your supplier manages the inventory for you. Your supplier will also be responsible for fulfilling orders and delivering the goods to your customers. The main benefit to you as the buyer is from reduced risk. VMI makes it less likely that you will run out of stock and you don’t have to worry about your inventory levels. The buyer, not having to bear the burden of managing their inventory, will allow them to allocate more resources into streamlining other areas of the supply chain.
Choose the right supplier for your business
When choosing a supplier, it is important that you do your research properly. There are many factors to consider such as price, quality, reliability and location. How you go about weighing these factors should be based around your business’s overall strategy. A great ways to researching potential suppliers is through their social media profiles and online reviews to see how other businesses have dealt with them. It is important to note that selecting the wrong suppliers can lead to delays, upset customers and reduced profitability.