How to Improve Your Inventory Management
How to Improve Inventory Management: Inventory management done well will radically have an effect on your supply chain infrastructure. Supply chain managers and inventory managers must not rest on their laurels. They should always find ways to improve their inventory management system. A lot of huge retailers invest millions of dollars yearly to improve their inventory management system. So they can stay competitive and improve efficiency within their organization.
When you have a great inventory management system in place, it can prevent stock outs which can cause you to lose sales and leave customers dissatisfied. It will also help you to have a better sense control over your stock. So you will see where and how to look for your correct items. Furthermore it can help prevent having a lot of similar products piled up in your warehouse which are caused by over production.
When you improve your inventory management system you will deliver better quality products to your customers. It will also help you to cut cost and manage your overall inventory processes better to make it more efficient. Below is a list of best practices you can use in your organization to improve your inventory management.
Liquidate your unwanted inventory
Almost every in inventory you will have materials and products that are just sitting collecting dust. This can be a huge problem if you have a lot of products sitting around that’s either stopped being sold or expired.
You should make certain that you are always checking your inventory for waste products and materials. It will help you to organize your overall products better and reduce cost.
Invest in Information technology
There are companies who are still using the same inventory management software system for decades. This can be a huge problem and disadvantage because some of these systems tend to be buggy and very inefficient.
Some of the more sophisticated softwares can be quite costly but it’s definitely worth it. You will see an improvement in how you approach inventory management. By watching and keeping an eye on the different processes you will make proper business decisions.
Organized your stock items
Better organizing your stock items will radically improve the efficiency of discovering the item. This will make it easier for your employees to find and stock products.
Most companies tend to organize their inventory different. It would be great though if you put the products that are selling the most at the forefront where workers could get it quickly. This is not a fixed process. You would have to continuously track the rate of your output. It will allow you to see which products are selling the most and least. So you can adapt your warehouse to that change.
Use key performance indicators
Key performance indicators would serve you greatly in tracking your different inventory management processes. Will help you to spot processes that have a high level of inefficiency. You can then develop plans to help solve that issue to improve your inventory management.
You should measure metrics such as the lead time. This is the amount of time it takes to get inventory from your suppliers in this case. Tracking your stock cover will help to track the amount of time a possible inventory will last by looking at the rate of its usage.
In summary improving your inventory management system will greatly improve your overall supply chain management infrastructure. As a manager you should ensure that you are always tweaking your inventory management processes. It will help to improve efficiency and bring more value to customers.