Inventory management software can make a big difference in helping to decrease your inventory gap and boost your profit. Here's what to know:
You know better than anybody how many variables are in play during an average day in warehouse and inventory management. There’s low-turnover merchandise to look after, high-demand merchandise to re-order and equipment breakdowns to contend with. With global e-commerce raising the bar for efficiency and competitiveness, it just makes good business sense to look atinventory management software for supply chains. Here’s what you should know.
Why worry about inventory gap?
The primary advantage of reducing your inventory gap through smarter inventory management is cost savings. You’re probably not surprised — any gap or delay between inventory (supply) and the satisfaction of customer needs (demand) means lost profits. You also don’t want your warehouses or your vendors moving more product than they actually need. Inventory management dashboards can bring you better forecasting, a more visible and accurate approach to inventory counts and much more. Managing inventory more closely can reduce some of the more intolerable sources of inventory gap too, such as employee theft. When there’s a repeatable workflow for the handling of products and an accurate-in-real-time inventory management system to back it up, the attractive nuisance of having so much valuable merchandise close at hand starts looking a little less attractive. Then, think about the requirements of multichannel ecommerce sales. If your company offers customers and vendors a variety of platforms from which they can place orders or request service, you need a single order processor to keep everything straight. With modern-day warehouse management, you can easily automate your system. This can reduce ergonomic hazards employees face regularly among other safety risks. Invest in a system that can automatically receive and prioritize orders and check orders against existing inventory. New software can also plot likely sales forecasts to inform production decisions. Maybe the bottom line here is that inventory gaps and poor inventory management are types of liabilities. They make you liable for employee theft. They make you liable to re-order product that’s already sitting in your warehouse. They might even make you the weak link in an otherwise efficient, well-running, multi-discipline supply chain. Here’s a closer look at some of the advantages of bringing modern inventory management software into your operations.
Solve inventory problems proactively
If you’re tired of playing catch-up or scrambling for a course of action after something unexpected happens, you’re a prime candidate for inventory management software. And one of the most common events in warehousing is finding out you have more — or less — inventory than you thought. The best software for warehousing is one that builds a digital database of every incoming and outgoing SKU scan, in real-time. You’ve probably done one or two scheduled hand counts and paper-based inventories in your time. But thanks to QR codes, bar codes, RF scanners, RFID tags and other technologies, your database of available inventory can now be up to date, always, with every change in custody accounted for, from shipping to warehouse stowing to order picking and, eventually, packing and labeling for shipment again. You can still do random counts for peace of mind, but you’ll never again wonder what you have or where it is — or whether you’ll be able to meet incoming demand.
Better manage your available space
Devising more efficient and logical workflows is equal parts science and art. First-In-First-Out stowing of products and picking of customer orders is important for any number of reasons — including time-sensitive products and, let’s be honest, the accumulation of dust in product racks that comes from un-churned product. But making sure items are stowed with FIFO and size requirements in mind can help on both of these fronts and more. Just like your warehouse management software can provide real-time information about the materials coming and going from your facility, it can also give you a better understanding of your available storage and racking space. And it can help you arrive at better and more efficient solutions. For your stowing needs, management and pathfinding software can direct employees to the appropriate areas of the warehouse and automatically find bins of appropriate size and configuration for the incoming freight. The best systems can maximize chances to practice FIFO as well as cut down on mis-stows. What does this development mean for inventory gap? For a start, it means you’ll have a much lower chance of letting sensitive products spoil on your shelves because newer product was stacked on top or in front of it. Losing that many potential sales and having to scramble for new inventory can be devastating, and your bottom line might never recover if it happens at the wrong time of year or in the wrong season.
Balance anticipated sales with leaner manufacturing
Have you ever been in a situation where your sales teams were requesting extra inventory so that they would never miss a sale, only to be rebuffed by your supply chain managers, who had already been moving to leaner manufacturing principles? Finding the ideal middle-ground is something inventory management software can help you with. Your operation probably depends on manufacturers interfacing with procurement managers in warehouses and retail stores. If that’s the case, the importance of being as proactive as possible about ordering (or not ordering) new inventory becomes apparent. For example, you might have a product that turns over in your warehouses only once or twice a year. But if your sales teams bring about an unexpected, off-season demand for one of those products, you want software that can call upon the necessary parties in as timely a fashion as possible to meet demand. And more than that, you want enough data coming in that this intelligent, de-centralized system is able to produce reliable lead time estimates for everybody waiting downstream.
Bringing a deliberate and, as appropriate, technologically advanced approach to managing inventory can be helpful in a variety of ways — but most of all in helping make sure there’s never too wide a gap between what you’re earning and what you have the ability (or the inventory) to earn.
Author: Megan Ray Nichols
Source: Smart Data Collective