10 tips to streamline your inventory management
Inventory management is a meticulous balancing act. As your business grows, the fine lines between inventory tasks such as holding stock, fulfilling orders, replenishment and demand forecasting can blur – creating headaches for supply chain managers. The good news? There's a remedy for these potential headaches.
Before we show you how to streamline your inventory management system, let's look at why you should. Fundamentally, it's about your bottom line. According to one report, the companies that lead the way with logistics, warehouse management and supply chain performance also achieve significantly better financial results. "Supply chain leaders deliver on time in full (OTIF) on 95.7% of occasions and have an impressive 15.3 inventory turns, while the laggards achieve only 3.8 turns."
As well as saving on capital and operational costs, a well-oiled inventory management system will also enhance the customer experience – because products are always in stock, the right orders get sent to the right customers, orders get delivered on time, and returns are handled smoothly. And happy customers are repeat customers.
So how do you do it? Here, we share 10 tips for streamlining your inventory management system.
1. Use inventory management software
The right software will save you time and reduce errors. It automatically tracks the value and level of inventory, and gives customers greater visibility into your stock levels.
2. Integrate all your data systems
Ensure all data systems talk to each other. Think about everything from mobile computers, label printers and barcode scanners, to back-end Customer Relationship Management (CRM), financial and shopping cart systems.
3. Set up real-time data monitoring and alerts
Once you've integrated your data systems, set up alerts for both inward and outward goods. These instant snapshots help you make better business decisions around acquisition and fulfilment.
4. Automate high-volume operations
If you're steadily turning over high volumes of stock, consider automating your materials handling system. It's a big up-front investment, but it can pay off for larger operators.
5. Conduct regular audits
Stocktakes and cycle counts will tell you where fast-moving stock sits, so you can triage the most valuable stock. It also helps to keep inventory accurate and attain maximum fulfilment.
6. Get smart with warehousing
Think about where you place your products. Travel time can be a massive money-waster in picking and packing – you want the fast moving stock as close to the picker as possible.
7. Invest in demand planning
This helps you create a just-in-time model and align your manufacturing cycle with sales. It's all about lowering the amount of inventory you hold and freeing up funds.
8. Aim for FIFO management
Unless there's a good reason for it, you want to move the oldest stock out the door first. That's why first in, first out (FIFO) is typically touted over last in, first out (LIFO).
9. Share information across the supply chain
Talk to each other! Sales forecasts help warehouse managers plan stock levels, while procurement reports help sales teams reassure customers about stock availability.Communication is key.
10. Consider the benefits of 3PL
Third-party logistics (3PL) providers offer plug-and-play platforms for full supply chain management so you can focus on your core business. By outsourcing to StarTrack, you get alerts, access to best-of-breed technology and software, transactional transparency, and the security of a real partnership to help you achieve your financial goals.