For wholesalers, there is no room for complacency in inventory management as they face a unique set of business challenges. One of the most testing of these is managing a large and highly diverse inventory. Poor inventory control processes can be costly, both financially and in terms of customer satisfaction and retention. You may see the risks and opportunity, but how do you sell an investment in inventory management to the rest of the management team?
Developing a reputation for reliability
Wholesalers are in the business of being dependable suppliers. Retailers trust and work with wholesalers to take the risk out of their supply chains. Barring an act of God, retailers expect to be able to place and receive an order in good time. Obviously you cannot sell what you do not have, so it is crucial to manage stock levels to avoid letting your customers down. By implementing comprehensive processes for managing your business’ inventory, you’ll be able to avoid being caught without enough stock on hand. Reliability gives a wholesaler a competitive edge. Although wholesalers will always compete on price, trust and reliability are also major factors to consider.
Improve your margins by holding a lean inventory
On the other hand, having excessively large reserves on hand can take away your competitive edge. Tying up capital by buying and handling excess inventory is expensive, and has to be factored into the prices you charge. Investing in real-time, perpetual inventory management processes reduces the risk of holding less safety stock, while leveraging product and sales data can enable you to anticipate stock requirements ahead of time.
Reduce inefficient processes
Implementing modern inventory management software can reduce your operation’s reliance on manual processes, cutting lead times and minimizing labor costs. Paper-based ordering can be phased out and replaced with an online system that integrates with your inventory infrastructure. Labor intensive processes such as stocktakes can be sped up using electronic tagging or barcode scanners.
Wholesaling can be a complex business – a diverse catalogue of products, spread across multiple warehouses and procured from many suppliers in several different currencies. With a comprehensive inventory management system you can find any item of inventory whenever you need it – whether it is at the distribution center, in transit, or on a customer’s shop floor. And with the right system, you should be able to see the true cost of every piece of inventory just as easily.
Implementing better processes for managing inventory can unlock vital insights. Constantly accurate data is best practice in inventory management. Having a real-time picture of your inventory leads to better quality decisions, especially when someone has to make a call on the fly. Reliable data also forms the basis for understanding trends and anticipating both business challenges and opportunities.
Although some inventory issues are common to many industries, wholesalers face inventory challenges that other businesses do not. Because wholesalers operate at scale, neglecting getting inventory management right comes at a large cost. Optimizing stocking decisions, reducing paperwork and leveraging data make any investment in improving inventory management worthwhile.