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Top Inventory Management Strategies to Adopt
Top Strategies for Inventory Management
- Out of the many methods that are in practice the Just in Time Management system fulfils only current needs with some expected orders kept in stock. This optimizes storage space cost-effectively. Taking a cue from Trade Gecko we feel that this is a good practice because dead stocks do not accumulate. However, buying habits, seasonal demand and sourcing must be strictly researched into and followed accurately in order to succeed.
- Inventory Management strategies need to vary from company to company depending upon your needs and your investment capability or capacity to take a beating, God forbid. There is, unfortunately, no single magic formula and you need to find your comfort zone where service levels can go up but the cost is reduced or maintained. As Laran Joseph says, “A mismanaged inventory can lead to an unnecessary increase in the working capital. The excess funds could have been fruitfully directed to fuel the company’s growth initiatives or research and development efforts.”
- To guard against unexpected surges in demand a seller needs to be prepared even though he must watch out for problems due to understocking or overstocking. The idea is to maintain a balance in everything. However, you must keep a track of both inventory and sales data for this
- Automation is the ultimate key to many a problem of Inventory Management. So amongst your strategies, automated Inventory Management strategy must be a priority. It is effective, efficient, time-saving, precise and productive besides reducing errors. Simplify the entire system with reputed software because the answer to this lies in choosing the right tool. Data analytics is also a compulsory tool amongst the top inventory management strategies to adopt by an E-commerce vendor. This elucidates information regarding products and sales forecast extremely fast. Thus the inventory can be scaled up and down as per market demand.
- However there are some key elements that need to be part of your strategy. A web based solution, which can prove to be of integral value to your company because it is not only budgeting friendly but also easy to integrate into your entire business strategy. Besides this other solution that can be of primal value to you is Mobile Inventory so that you can get alerts on the go. A few more important takes are the use of barcoding which will ease the entire process, data importing facility to save time, your system should also offer the process of bulk transactions in order to get bigger jobs done easily. The primary goal here is thus to have all jobs done with ease and automated Inventory Management strategy is one of those jobs. The system should also be able to perform with easy cycle counts of supplies and stay informed in order to stay ahead with automation.
- By using the appropriate solution you can also break down the requirement for inventory to ensure smooth operations for your business with planning periods.
- Remember that “Inventory Management is a continuous, concentrated effort and a process that shouldn’t be handled solely at the operations level. A successful inventory plan should also involve your marketing, catalog, E-Commerce and Merchandising departments.” This ensures that all departments work in sync for the success of the company.
- Another strategy that can be used is for the wholesaler to hold the goods till the retailer sells them which means the retailer does not pay but the goods are held for him till the actual sale thus saving your investment on dead stocks which are a problem if Inventory Management is not done correctly.
- Aim at an accurate forecast to make informed decisions and predictions after customers have placed orders. Identify and monitor needs and review orders and stocks carefully and closely. For this good software can help you as also having the right people for the right job. Make employees feel they own the inventory and choose people with an analytical bent of mind.
- Finally the strategy to track goods is very important and to effectively do this, use batch numbers. Lot tracking is another top Inventory management strategy because it can help to track where the goods come from, where they go, their expiry dates and even quantity shipped. You can thus optimize your business by leveraging this data by managing your inventory efficiently.