Five Ways to Optimize Your Inventory Management Now

Business leaders know that keeping up with customer demand can be, and often is, a full-time job. This is even more the case as consumers become increasingly discerning, expecting lightning fast shipping and delivery, immediate responses to their inquiries, and organizations that keep a healthy product stock and never run dry of critical items. Thus, when a prospect is ready to make a purchase, the last thing you want to have to tell them is that you’re out of the product they want, or even worse, that you can’t locate it in your system.

That’s why inventory management is so important. Staying on top of what you have, what you’re missing, and what you need to order more of is critical to running a successful and thriving organization. Let’s take a look at five ways you can optimize your inventory management system today.

1. Track your levels diligently. While some office functions might be doable with outdated legacy systems, inventory management isn’t one of them. It’s important to invest in high-quality inventory software that can help you instantly pinpoint your product levels in real time. That way, you’re quickly aware when levels are dipping so you can reorder and avoid running out.

Moreover, these modern systems also produce use reports and other data analytics so you can view product performance and avoid overstock issues. If a particular product is taking up valuable real estate on your shelves but no one is buying it, it might be time to reconsider keeping it in the rotation. You can also use these systems to automate your order receiving, processing and delivery systems so you’re always on time.

2. Prioritize the needs. Experts reveal that 80% of your businesses’ demand is generated by 20% of your customers. That means there is a portion of your sales that carry a higher weight than others and some clients might be more valuable to your financial health. If this is the case, make sure those highlighted products are never out of stock and focus your efforts there. If you fail to prioritize, you might view every single product as essential to your success and feel overwhelmed and unsure where to start.

3. Identify and remediate problem areas. Chances are, if given the opportunity, you could list about half a dozen things you’d change about your current inventory management techniques. Across myriad industries, from the retail sector to Food and Beverage (F&B), leaders are dealing with a host of issues trying to keep track of orders and keep customers satisfied. A few of the most commonly reported issues are surrounding:

Data management: Do you understand the data surrounding your target audience or do you have shelves full of products that no one is buying? Are you performing routine analyses of your product performance to see which ones are superstars and which are duds?

Activity coordination: Sure, you may need to speed up delivery. But, do you know the optimal way to do so, or are you just trying to work quicker with the resources you have? If the answer is the latter, you could end up spinning your wheels but going nowhere.

Communication: Are you communicating with your manufacturers to get accurate lead times and procurement dates? Are you encouraging your customers to leave feedback detailing their opinions on your offerings so you can make more accurate judgments on inventory levels?

4. Understand who does what. Take an audit of who in your company is performing which function surrounding the inventory management process. It’s important that everyone knows what everyone else does so that a cohesive work process can take place. Take stock of the entire Order-to-Delivery (OTD) system. If you determine that two people are performing the exact same function, question the logic behind this. Hold in-person meetings with key individuals to better understand their roles and functions within the greater sector. This way, you’ll know exactly who to go to when a link in the chain breaks down the line.

5. Develop an inventory management plan. Develop a comprehensive inventory management plan that covers every detail of how the process should take place. Create it alongside the key decision-makers in this sector and place copies in key office locations such as the conference room and warehouse. Routinely perform a check of this documentation to make sure it’s up-to-date and still accurate, making adjustments where necessary.

A seamless and smooth-running supply chain doesn’t have to be a pipe dream. With open and clear channels of communication, defined personnel roles, and support from modern automation, you can keep customers satisfied, product in stock, and your bottom line healthy.