Check out these key steps to optimising your inventory management…
Optimising your inventory is all about maintaining the right amount of stock required to meet demand, keeping logistical costs low and avoiding common inventory issues such as stockouts, overstocking and backorders – ie running a lean inventory.
Running a lean inventory ensures stock control is managed efficiently by implementing processes, technology and techniques to track inventory in real-time to make better purchasing decisions and optimise storage.
Managing Inventory Levels
Running a lean inventory is a crucial balancing act. Excessive inventory increases storage costs and obsolete goods, while insufficient inventory can lead to stockouts. Regular analysis and adjustment of stock levels is vital for efficient inventory management.
Warehouse Management System (WMS)
An advanced warehouse management system (WMS) is key to optimising inventory control. Such systems provide real-time insights into stock levels, transaction and inventory movements – basically a full audit trail and manage all the processes listed below:
Stock Replenishment
Effective stock replenishment ensures that inventory levels are always at the right level. Automating purchasing and replenishment helps in maintaining a constant supply without overburdening storage capacity or tying up too much capital in inventory.
Inventory Storage and Bin Locations
Efficient inventory storage is achieved by organising items in a way that maximises space and minimises retrieval time. Utilising bin locations helps in locating items quickly and accurately, enhancing the efficiency of warehouse management.
Barcode Scanning
Through barcode scanning, companies can automate the pick, pack and dispatch process; allowing them to get the right quantities and products to the correct location faster. Data entry & processing is quicker, errors are reduced, more orders are fulfilled in less time, inventory management is improved and costs are reduced as a result.
Managing Composite Items
The ability to manage composite items (bundles that are made up of multiple products) – for example a table and 4 chairs, is crucial. An effective inventory management system should be capable of tracking not only the composite items but also their individual components. These items impact overall stock levels and costs. Managing composite items efficiently requires a system that can automatically update inventory levels as components are purchased, sold or returned in order to ensure accurate tracking and replenishment.
Customer Demand
Accurate real-time inventory management can aid when making purchasing decisions with regard to stock. By analysing historical sales data and market trends businesses can make decisions when looking at future customer demand and prepare for varying market conditions. This can prevent both overstocking and understocking and maintain a balance that is cost-effective and responsive to market needs.
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Author: Iain Coplans CEO Stok.ly