Inventory management is a major part of running most businesses but especially in the manufacturing and distribution industries. You have to be ahead of the game but not too ahead.
Which is worse: having too much of inventory on hand or having too little and having increased lead times? I believe it is not having enough inventory to fulfill orders. Lead time is usually a key factor in most customer\’s decision process on whether they are going to purchase from your company or not. With that being said how do you stay ahead of demand without leaving too much inventory in your precious warehouse space? Here are three tips for controlling your inventory.
- Implement inventory optimization tools
There are plenty of stand-alone software tools out there to keep track of your business’ inventory. Finding the right one for your company might take some trial and error but I promise you it will be worth it. Drop the spreadsheets that your employees forget to update or can accidentally delete and invest in something that will improve the success of your business. Utilize mobile devices which can allow quick access to accurate information and data from virtually anywhere. That means any of your distribution centers or warehouses can have access to all of the same data from any of their mobile devices. From the sales floor to the manufacturing plant the use of mobile can allow your managers to make quick and smart decisions on inventory. This can also help to eliminate errors and delays associated with paper or spreadsheet based operations.
- Not all SKU’s are the same and should be treated like they are
While there may not be one type of solution that will fit all companies there are some general guidelines that can help set you off on the right track. Firstly you should be determining which items sell the most and how quickly they make it off the shelves. These items are constantly in rotation from manufacturing to shipment. This does not mean ignore your slow moving items. Every moment of every day these items remain on the shelves they are taking up space and getting in the way of more popular items, run the risk of becoming obsolete, and utilizing labor and resources. What does that all mean? You are wasting money. Money I am sure that you would love to put back into your business’ bank account.
- Be prepared for potential disruptions
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mical like fuel prices or geological risks like weather and logistics. Make sure you have a response team in place in case these risks do become an issue and stay on top of current events so you know whether one of your suppliers – or yourself – will be hit with an event. Keep open relationships with multiple suppliers. This will give you options and hopefully keep your company moving if an event does happen and your normal suppliers are not able to fulfill your demands. Keep documentation on your primary and backup suppliers. Make sure you are testing your plans regularly and always back up your files.
Making sure you are keeping a watchful eye on activities within and outside of your business will help you immensely with your inventory control goals. Knowing what flies off your shelves and what does not sell at all will also help keep your inventory in check. Lastly, employing new software tools and staying away from spreadsheets can and will make your company much more efficient in tracking and controlling your inventory.