It’s a crucial part of running a profitable business that can help you reap cost-savings: effective inventory management practices that ensure you’re responding to customer demand quickly
Inventory is among your business’s primary assets. Proactive inventory management is the art of overseeing, controlling, storing, and distributing your goods in adequate quantities to meet customer demand, and avoiding gluts and shortages. Too much inventory weighs on profits; shortages equate to missed opportunities and lost sales.
From Vancouver to Toronto to Halifax, businesses across all industries rely on efficient, competent inventory management and logistics. It can be difficult to attain and maintain because of a variety of reasons including inefficient processes, a lack of internal communication between departments, a lack of visibility into supply chains, and sudden and unexpected spikes in customer demand. Without a complete and constant view of where you stand with your inventory, it is impossible for your company to achieve profitability and sustainable growth.
Five Perceptions about Inventory Management Which Are Wrong
In the Digital Age, there are five general misconceptions about inventory management that you need to dismiss:
- You don’t need inventory management software. Nowadays, it’s folly to rely solely on human beings to manually count, track, and report on all of your inventory on a daily or hourly basis. As a critical business process, deploying an automated inventory management system is mandatory for achieving fluid supply chain success.
- All inventory management providers and solutions are the same. Is an apple the same thing as an orange? Is a MacBook the same as a Windows-based laptop? Of course not. Similarly, don’t assume all inventory management providers and software solutions are alike. While some functions will mirror others or may be commonplace in varying solutions because they’re necessary, there will be major differences, too. Each technology offers its own complexities and functionalities. The one you opt to go with needs to match your company’s unique IT standardization and process requirements.
- Inventory planning should be an independent function. When conducting inventory planning, it’s important to include your firm’s sales and operations planning teams and processes to get the full view of where things stand. Doing so gives your company an edge regarding inventory intelligence and a holistic approach to overall supply chain management.
- Spikes in customer ordering patterns never change. While it’s true to say to a degree that seasonality drives consumer demand, good customer service etiquette dictates you be in-the-know when it comes to your top customers’ promotion schedules, and be ready to fulfill product demand increases whenever they are.
- Good inventory management is dependent upon employee productivity. It’s wrong to assume effective inventory management relies entirely on employee productivity. In fact, it’s companywide access to an inventory management software that suits your organization’s needs and its culture that, in turn, yields efficient operations and ensures your inventory goals are met.
Automation: The Magic Elixir
Without automated inventory management and asset-tracking software, you and your colleagues can access at any time and anywhere, you’re running unnecessary risks that could inflate your costs. Using multiple spreadsheets to manage your inventory is inefficient and error-prone.
A centralized inventory management system, however, ensures you have full visibility into your stock levels in real-time, automated forecasting and analysis requirements, and the ability to deal with unexpected rises and falls in customer demand. Furthermore, and through the use of handheld digital barcode scanners, automation provides an accurate picture of your inventory, and it helps to simplify documentation, streamline internal processes, and save time.
Regardless of the business vertical, you need real-time data on current stock levels, new orders, and more. It may be that a vendor-managed inventory (VMI) solution is best for you. Or, it could be your company requires a third-party logistics partner. Whichever direction you choose, you need to know you have total control over your inventory to reduce your overhead, and gain the operational efficiencies you need to continue to thrive.
Grappling with inefficient inventory management processes and costs?
We can help. Our full range of inventory management services can give you the visibility to your goods you need and the flexibility to make changes on-the-fly. Let’s talk about how we can help you grow your business with an effective inventory management system.