The Ultimate Guide to Inventory Management (Part 1): Boosting Efficiency
We know that inventory management can cause a headache. From overstock costs and warehouse space restraints to inefficient picking and inventory errors, you can be faced with multiple problems at any given moment.
However, effective inventory management is the basis of a well-functioning business. If a business does not have a handle on their inventory movement, or worse, track it through separate systems, or manual — and error-prone — labor-intensive spreadsheets, the rest of the business processes, like order fulfillment, do not fall into place.
We’ve made a list that breaks down common challenges that warehouse and operations managers face helping you identify inefficiencies in current processes.
Let’s explore some changes you can make to gain benefits and improvements for your operations.
How to Start Improving Your Inventory Management Processes
Let’s talk about the Inventory Management strategies currently being used in your business. What are your processes for Inventory Control?
Think of Inventory Control as supervision — it’s the process of ensuring that all inventory and non-capitalized assets are stored and organized in the right places, in the right quantities, and available at the right time. It’s also about tracking their movement internally, inbound and outbound.
Proper Inventory Control requires efficient receiving, put-away, picking, packing and shipping of inventory. Your systems should streamline and prioritize the processing of customer orders and supplier orders. Without proper inventory control, you risk costly errors like missed or late shipments, out of stocks, overstocks, mis-picks, and so on.
Use a Centralized System
How do you currently track your inventory movement, levels, availability and replenishment levels? Does your sales order and purchase order platform communicate with your inventory management system? Or do you scramble with spreadsheets or paper to collect the information you need?
To manage inventory effectively, you need it to be part of your ERP, which is a centralized database that’s accessible to authorized users. It should provide inventory status in real-time, from all locations and from all sources, to all required users. It should answer these questions:
- What is currently on sales orders?
- What is on existing purchase orders?
- How many of this item can I sell? When are more coming in?
- What is the sales history and forecast of this product?
- What is the lead time required for replenishment?
You will get faster, more accurate answers to these questions if you use a centralized ERP system. A single source of information is key to having a complete, accurate picture of your supply chain and your inventory needs.
Enjoy real-time, detailed visibility into key inventory control and supply chain management measures, including inventory trends, inventory on supplier order, inventory on customer order, aging inventory and so much more.
Consider investing in inventory and warehouse management technology that helps you better manage your inventory from supplier to customer.
This blog is the first in a series on Inventory Management. To find out more about the features you need for your warehouse management system, talk to us.