Making the best use of top inventory management strategies has never been more important than in recent years when supply chains were repeatedly disrupted by global events such as the pandemic, wars or extreme weather. Having too much or too little inventory both comes at a cost to your business, so read on to find out the top strategies you should employ in your inventory management.
- Just in time (JIT) inventory helps you ensure that only what is currently needed gets fulfilled. Thus, you will save on costs, including warehouse charges or even expired goods. Using this strategy guarantees you are prepared for current orders, avoiding overstocking or running short of goods exactly when you need them.
- Safety stock inventory allows you to have a fallback plan when demand increases because you are prepared with surplus inventory. With this strategy, you need to pay attention to hitting the right balance between having enough inventory to honor your orders and a little extra for the unexpected, but at the same time avoiding having too much.
- Periodic and perpetual inventory management differ in terms of how frequently inventory is being tracked and documented. With periodic tracking, you are checking your inventory at set intervals and while this might mean you’re spending less time doing it you also risk realizing too late that your inventory has issues. On the other hand, perpetual management is an ongoing process allowing you to keep track of your inventory constantly. But it can also take a lot of your time, so this is where automation comes into play, a strategy we will discuss next.
- Inventory management automation is key when you need to cut costs and increase efficiency. Unlike manual input, it is less prone to errors and can help you save time and money. Especially in fast paced environments, you don’t want to leave your inventory management exposed to human errors and time consuming manual processes.
- Data analysis is another crucial strategy as you can base your decision on actual data and usage reports rather than predictions. With the right tools, you will be able to easily analyze your data and determine what can be optimized. Having these insights ready can also help you communicate more easily with suppliers and clients as you always have a clear overview of your inventory.
- Inventory forecasting is closely connected to analyzing data and it gives you the opportunity to plan accordingly in order to meet customer orders and needs. Using the right models, you will be able to anticipate shortages that could lead to unfulfilled orders and unhappy clients or avoid oversupply and waste.
- Mobile app integration needs no further introduction as we are all aware of the advantages of having instant access to data from your phone. Making use of such integrations will make you more responsive and help you stay on top of your inventory management no matter where you are.
- Bulk shipping is defined as the shipping of goods and raw materials in large quantities and without any packaging. The vessel transporting the goods usually acts as the container. This strategy is popular because buying in bulk is usually more cost effective and you ensure you will never run out of the inventory needed to run your business.
- Batch tracking is another strategy used in inventory management and it allows you to keep close tabs on your goods and products. It essentially means your inventory is traceable at all times, from start to finish. For example, by using this strategy you can keep track of expiry dates or be able to recall a specific batch only if you need to.
- Consignment inventory usually involves a supplier and a retailer that work together to get the best results. It essentially means that the supplier is still in charge of storing and handling the inventory until it gets sold by the retailer. The advantage for the retailer consists of lower to no storage costs, while still making sure inventory is available when needed.
These inventory management strategies will help you stay on top of your order fulfillment cycle and customer requests, cut down on unnecessary costs and save time by making sure you always have the inventory you need. At the same time, you will not risk having too much inventory which usually leads to increased storage costs and wasted products.
Using MRP software will position you as a leading provider in your industry, helping you implement all of the above strategies successfully.
Also Read: 4 Store Inventory Management Strategies for Retail Clothing
