Working in a digital world means adapting to the changing dynamics of business. When it comes to inventory management, there are many factors involved. Streamlining some of the processes means simplification and improved efficiency. And it only makes sense to get your inventory management in gear. Fewer problems with low stock levels, being unable to meet requirements and dealing with stockouts (situations when demand exceeds the amount of inventory you have on hand). Stockouts are not a great thing. They typically result in higher risk, lost sales, and very unhappy customers. Sometimes, the situation is out of your control, but often your organization can play a direct role in preventing these situations. Automating inventory management is the preeminent means of preventing costly interruptions, keeping enough inventory on hand, and ultimately improving the customer experience.
Improve Buying
Procurement takes time. To put it another way, think of the procurement process as trying to buy home insurance or get homeowners insurance quotes. It’s a simple concept, but it is incredibly time-consuming and requires plenty of effort to get the ball rolling. To streamline employee purchases (especially items like office supplies), guided buying is a wonderful tool to reign in employee spending while improving the efficiency of making micro-level purchases. Most procurement contracts cover larger, industry-sized contracts. Removing smaller tasks from the equation, effectively reduced the procurement department’s workload while supplying better access to important supplies at the same time. Since guided buying is based on personas that are assigned by upper levels of the company, it’s easy to track and remain in compliance as employees use guided buying. Improving your buying process should be among the top goals for your organization.
Improve Fulfillment and Prevent Fraud
Accurate and consistent fulfillment is a crucial aspect of a successful organization. Inventory management is key to this. Faster, consistent, and reliable fulfillment means happy customers and less excess inventory piling up in your stockroom. Accurate fulfillment also cuts back on potential inventory fraud, which is when theft of physical inventory occurs and is misstated on official company statements. As an inventory/procurement manager, mitigating fraud is one of your most critical roles. Employees and suppliers can both be responsible for fraud at the inventory level. Watch out for missing packing slips, inaccurate reporting, and customer complaints. Use your tracking and managing software to search for patterns and vectors indicating potential fraud. By remaining vigilant, you can make customers happy, reduce potential fraud, fulfill orders the right way
Better Stockroom Managing
Automating inventory in your stockroom is another top method of improving logistics. There is a bit of a human touch here, however. Since you’re dealing with physical spaces, it’s important to know what’s actually contained in them. That’s only part of the battle. Unless your company owns a lot of warehouses and real estate (or has some kind of box that’s bigger on the inside), the odds are managing your stockroom is going to be slightly more complicated. That’s why defining clear goals for your team will help them understand why managing the stockroom is so critical. Layout and define goals/metrics, then have your team and software implement them for you. In the actual warehouse itself, communicate. On the non-management side of things, make sure your warehouse workers are keeping things organized, using proper safety procedures when moving inventory, and keeping up with OSHA compliance. Using your inventory management system in tandem with some of these methods will ensure success in the long run.
Improved Visibility
Another key performance area to watch out for is visibility. The most significant way it does this is by monitoring orders, analyzing trends, and helping you make decisions fast. Keeping tabs on your inventory limits overbuying situations and keeps your stock from getting out of control. This has the side effect of reducing storage costs and limiting any possible re-purchases. Waste is also less of a concern because you’re keeping a close watch on what’s in your warehouse, where it’s going, and whether it’s needed or not. More consistency improves efficiency, gets orders to customers on time, and eventually enhances your relationships with them. It’s remarkable just how positive having a little bit of visibility into your inventory management process and strategies can be. If you employ the just-in-time inventory strategy, better visibility means you can order and receive materials quickly, with real-time tracking. Visibility also has the benefit of showing you what’s happening at point-of-sale, in shipping, and throughout the procurement cycle. Seeing and understanding your inventory in real-time helps you ensure you’re operating with the optimal levels of stock and sets you up to make better decisions in the future.
Reduce Spending
At the end of the day, better inventory management reduces spending. Keeping tabs on your inventory limits overbuying situations and keeps your stock from getting out of control. This has the side effect of reducing storage costs and limiting any possible re-purchases. Waste is also less of a concern because you’re keeping a close watch on what’s in your warehouse, where it’s going, and whether it’s needed or not. Ultimately, good inventory management software can help you reduce organizational costs by giving you important insights into spending, thus optimizing it for the future.
