How to improve inventory management control to the power of 8
In this article, we’ll show you definitively how to improve inventory management control in eight straightforward steps.
Experts with a combined eighty years in the field have contributed to this list, which seeks to revisit critical strategies we feel have been lost in recent years.
While inventory is the lifeblood of your business, that blood is composed of lots of different ingredients. These all have to be expertly balanced so the system can remain healthy. If your stock is too low, you risk disappointing your customers. Too high and you’re paying for extra transportation, handling, storage, and labor. Either way, the issues pile up.
Once you’ve calculated the right amount, you then have to ensure it flows correctly and above all instinctively. Understanding that it isn’t just the item you have to watch but the stack of information that accompanies it, is vital when addressing the question of how to improve inventory management control. From there you should consider:
1. Inventory Optimization Tools
Optimization. This buzzword baffles many businesspeople. Put simply; it means using your resources efficiently. We recommend software tools as your best ally in evaluating the complex networks involved when considering the question of how to improve inventory management control. These stand-alone miracle workers minimize back office tasks by using data from your ERP (Enterprise Resource Planning) and WMS (Warehouse Management Systems).
Having worked out the best policy for each component in the bloodstream, the software then determines how much inventory you need so you can handle factors of variability. For example, the required parameters in relation to replenishment. The worst thing in business is to be out of business. The next is being out of stock.
Does this mean you should hand over the reins of your inventory to a faceless computer program? Absolutely not. The best software tools take the strain while still involving you in the overall scheme. They seek your approval at different stages rather than merely analyzing numbers in the cloud.
2. Real-Time Solutions, One Platform
The days of Excel spreadsheets as the lynchpin of inventory management are fast drawing to an end. Cling to them if you must, but in a fast-changing world, real-time analytics are being increasingly relied upon. Not only to run businesses smoothly but to create a shared, single platform. This platform functions perfectly as a unified yet flexible resource that all the links in the chain can benefit from.
Through this sharing, you can get a clear picture of inventory, of costs and of planning across the board, with everyone on the same page regardless of whether you’re dealing with one section or the whole shebang. Each stage of the product journey is tracked.
One of the strongest aspects of using analytics is that they’re reactive by nature. They can anticipate what you want to do and guide you toward the best outcome. Interactive scenario planning can be rapidly simulated and assessed, resulting in high-quality data upon which to base your decisions. You can even bypass the DC (Distribution Centre) by sending your wares from sea to store, without the middleman. Ocean carriers become floating warehouses where all it takes is a few clicks to get the stock labeled and sent directly to the retail outlet.
3. Not all SKUs are the same when considering how to improve inventory management control
By taking a clear and focused approach to managing your inventory you can maximize sales and profits and not fall into the trap of generalizing your product. Tempting as it is, you shouldn’t treat all SKUs (Stock Keeping Units) as having the same supply and demand variability pattern.
A good move is to plan for items differently, but also having different fill rates for each item category will help you hit your targets. The faster your items move, the higher the fill rate. The A items would be the quickest, so you’d have a rate of 99%, B at 98% and C at 95%. By using this process, called service level differentiation, you can boost resources for those products which fly off the shelves and divert time and effort from handling your slower items. You can then apply different forecasting and stocking policies to each segment.
4. Keep an eye on your suppliers
Sadly not all suppliers can be super-reliable. For this section, we would ask you to stop and think about unreliability as well as its favored counterpart. Your standard WMS analyzes how accurate your provider is. What would be great is if it could use the same data to highlight suppliers who fall short of the mark.
Closely monitoring all supplier activity, be it good or bad, is the way forward when you want to get those fill rates on the nose. Wouldn’t it be wonderful living in a world where ordering 1000 pencils actually got you that amount and not 900 due to inefficiency? Once identified, a constructive conversation should hopefully resolve any issues between you both and a happy relationship can ensue.
5. Track essential attributes
There’s more to managing an excellent inventory than just tracking one lot number. Sub components and sub assemblies also have lot numbers, and you’ll need to know these in case your product is recalled out of the blue. Capturing these attributes efficiently without spending more on labor and handling is a challenging task but here is some advice that you’ll find useful in this regard.
Manual intervention, space utilization, and labor costs can rapidly stack up if the right details are not captured the right way. We recommend electronically capturing COO (Country Of Origin), serial numbers and vendor lot numbers. That info is then automatically sent to the next link in the chain. Also the more energy you expend on tracking, the better it is for your trading partners. They can make timely decisions as you’re affording them increased visibility.
6. Leverage mobile devices
Haven’t gone mobile yet? An inventory accessed via mobile technology is faster and more accurate. Your personnel will thank you because they can check every aspect in real time, ensuring better customer service. Item shortages can be quickly identified, with stock racing from the DC to your store before replenishment issues crop up, and that’s just the tip of the iceberg.
You’ll be in sync with the vast majority of your peers, cutting down on errors due to a flexible user interface. You eliminate waste paper, reducing those carbon footprints and you boost efficiency. When thinking of how to improve inventory management control, this is a simple solution you can implement today. The results are noticeable almost immediately.
7. Be smart about slow-moving and obsolete items – How to control inventory in warehouse
They’re right under your nose but you rarely consider them – the SLOBs. SLow moving and OBsolete, they take up space when there’s no demand and burn through resources. If enough time passes for them to become obsolete, they’re a serious liability, suffocating the A items you’re ignoring them for in the first place.
Try to avoid running between locations trying to offload your SLOBs. Safety stock, so often the cause of many a meltdown, can be reduced and dealt with calmly. Consolidating this unwanted stock into one Distribution Centre also puts you on the right track, in addition to discounting and finding alternate sales channels.
8. Lastly, don’t neglect slotting when asking the question of how to improve inventory management control
A basic rule of managing inventory is by slotting, which relies on common sense and can be helped in a couple of ways. Firstly, anticipate what should go together. You know your stock better than anyone. Whether in the store or in bed on your laptop, that inventory data is always within reach. It’s very likely two items will have to be ordered on the same ticket. Putting them side by side in the picking area means less legwork for your employees and streamlined activity on the chain.
How about when you slot? Rather than taking care of all your slotting in one huge, time-consuming chunk, why not make it a brief, daily chore? A tiny amount of pain saves you an anguish-laden logistical nightmare in the long run. It’s how the best companies do it, and there’s a reason for that. Properly-managed slotting frees up more space more of the time, as you’re constantly monitoring inventory and can spot gaps that need to be filled. Don’t be one of those businesses that leave the major organization work till last.
We hope you’ve found these eight essential tips useful in addressing how to improve inventory management control. Follow the eight steps, and you will have mastered all aspects of your stock operation from seed to branch.
If you need further help, chat to our guru for solid advice.