Inventory management is the art of balancing what stock comes in with what stock goes out so that, in the ideal world, there is only a small amount left over and no stock is rendered obsolete or expired. Even though it can be simply described, inventory management is exceedingly complex and often needs a lot of behind-the-scenes work to set it up effectively. Having said that, taking the plunge is worthwhile as the future rewards are numerous. Here we will consider some key strategies to improving your company’s inventory management system.
Get inventory management online
If you are not already using dedicated software that stores information in the cloud and promotes accessibility from anywhere, then doing so is a step worth taking. Utilising specialised inventory management software will ensure that that recording, analysing and making decisions based on inventory data is accurate and streamlined. Some inventory management software products also have the additional bonus of storing information the in the cloud, making data accessible from anywhere. This keeps company operations transparent as data is updated in real time and can be added to in real time.
Reassess warehousing techniques and promote mobility
A big part of successful inventory management is the way in which stock is stored. It may seem basic but the correctly and efficiently storing stock is a fundamental principle of inventory control. The goal of course is to eliminate inefficiency by storing items in meaningful locations with respect to their use and ensuring that the older items most at risk of expiry are stored closer within reach. In terms of tracking inventory through the manufacturing process, it is extremely useful to install mobile, point-of-use devices or have an app which integrates with your inventory management system and which can be installed on your employees’ mobile phones.
A key aspect of inventory control is having an acute knowledge of where inventory is and what stage it is in the process at any point of time. Ensuring there is a straightforward means of recording this information will help to guarantee the accuracy and robustness of inventory data gathering across the company.
Reassess ordering procedures using data analytics
A great feature of inventory management software is the provision of real time data and analytics. By incorporating the data from these features into ordering, the company can then order with confidence knowing that market and location trends are taken into consideration. The company is then less likely to end up over-ordering and unable to sell stock or under-ordering and risk not meeting customer demand.
Analyse backup suppliers
There are always eventualities, however regretful, when inventory cannot be delivered and you must turn around and tell the customer that you cannot meet your commitments. There are a lot of bonuses to having well-vetted suppliers who you go to time and again, however it is worth considering having a back-up suppliers list of vetted suppliers ahead of time so that if you need to suddenly go to a new supplier urgently for whatever reason, you can do so quickly and with confidence.
Inspire your employees and create measurable goals
Total quality control and lean manufacturing are excellent goals for a company to have, but good inventory management practices are essential for these goals to be successful. It has been well-established that to ensure quality across the whole organisation, staff all levels must adopt a ‘quality first’ approach and be passionate about it. The same goes for inventory management. It is very difficult to get employees on board (and sometimes even management), so it is recommended to incentivize the system and create measurable goals and rewards if the company meets them. When all players have the same goals and gusto, the success of the team is guaranteed.
Listen to employee and customer feedback
You cannot fix something if you do not know it is broken. The same goes for your inventory management system. You may perceive that everything is running smoothly, but it is always beneficial to gain understanding from stakeholders who work with the system on a daily basis as there may be issues you are unaware of. Create an environment that allows employees and customers alike to provide honest feedback. This information is extremely valuable but can also be redundant if you do not actually take feedback into account and make changes within your business. It is important to ensure that continuous improvement, another concept of total quality control, is sought after and the time is created to achieve it. When employees and customers observe action based on their suggestions, morale and satisfaction goes through the roof!