Three Key Points In Inventory Management
Efficient inventory management is crucial to the success of a distribution company. There is no doubt that there is an art to maintaining the balance between the minimum stock on hand, to keep inventory costs low, and at the same time being able to fill orders.
Even if sophisticated stock management software is used, some guidelines must be followed to reflect it in the results.
Inventory costs are a large portion of a distributor’s expenses. The great visibility that an ERP system provides allows you to improve operations with an overview of inventory turnover. Combining historical order information with seasonal projections and trends is best to make the most accurate and reliable forecasts.
Keeping the minimum necessary stock saves on stocking, maintenance, and movements of excess stock in the warehouse.
Optimized stock levels affect more than just costs. Ensuring that the necessary inventory is available to fill full orders on time improves customer satisfaction and helps maintain customer loyalty. Automated management of inventories and purchases helps save time and effort by performing tasks that the ERP can perfectly control.
With proper management of the stock on hand, items are easier to locate, and order picking is optimized, improving the productivity of warehouse operators.
Remember that inventory management is not a task that can be defined and relaxed; maintaining a balance in stock levels, properly organizing the warehouse for maximum efficiency, and having a complete vision of the processes must be done continuously.
You have to make sure that costs and performance are well controlled. If inventory costs rise, perhaps the forecasts are not adequate. If customer satisfaction drops, take a look at your order history. Dig deeper and see why if you’re serving incomplete orders or items aren’t shipping to customers on time.
Therefore, it is essential to maintain a philosophy of continuous improvement to achieve maximum efficiency and profitability.