Accurate management of inventory is not only an important part in the running of a business; it is a critical aspect in the management of many industries. Achieving balance in your inventory levels can be a daunting task, but it is not altogether impossible. However, keeping your inventory even with inflows and outflows is not the only thing you need to do. You also need to manage these flows by managing the information that comes with them. But how exactly do you do that?
1. Break your inventory down into three categories: safety stock, stock for replenishment, and excess (or obsolete, if applicable) stock. How much stock do you need in order to keep your supply levels safe to avoid having customers wait for the products they need? How much stock do you need to replenish deliveries at regular intervals? How could you get rid of excess stock? By categorizing your inventory, you can make more informed decisions about purchasing and distribution.
Five tips to improve your inventory management
2. Recalculate your safety stock level regularly. You need to ensure that your stock levels are up to date by continuously recalculating your inventory every quarter using statistical formulas that yield accurate results.
3. Involve all relevant personnel in planning your inventory. Some organizations make the mistake of leaving all the planning to just one team. For inventory planning to be effective, you should include a cross-functional team with members that would contribute insights about the different factors that affect inventory
4. Monitor supplier activity closely. Some suppliers do not deliver on their promises, not only on the dates but also on the amount of stock delivered. In order to properly track and monitor how reliable your supplier is, look at the promised date, the actual delivery date, the quantity of the items ordered against quantity delivered, and the condition of the items.
5. Employ a customizable inventory management system that fits your requirements. Efficient inventory management solutions from DecisionPoint Systems and Zebra Technologies offer real-time visibility through the use of mobile technology like barcode scanners, mobile computers, and RFID transponders. By using a system that you can configure to your needs, you will be able to decrease and eventually eliminate errors with regard to managing your inventory. This then results in improved inventory stocking levels, reduced costs and increased revenue. Most importantly, being able to deliver the right product, at the right time and at the right price increases customer satisfaction, loyalty, and retention.