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Never wonder if you're managing your inventory efficiently again. Dig into why excellent inventory management is essential to streamlining your warehouse operations.
On a basic level, what's the purpose of inventory? It comes down to delivering the right product to the customer that ordered it. So in our experience, the goal of inventory management is to make it as easy and as efficient as possible to get that product to that customer.
Bad inventory management is a huge obstacle to achieving that goal. If you don't keep the right products in your inventory, you'll constantly find your high-velocity SKUs out of stock, which leads to delays, backorders, and unhappy customers. And you'll have too many of the wrong things — or dead stock — which means you'll be wasting space (and money) on unwanted items, many of which might expire or depreciate quickly.
Poor inventory management can disrupt warehouse management, too. The less control you have over your inventory, the worse your warehouse will perform. The same is true of accurate data for inventory certainty: discrepancies in stock can cause costs to spiral, errors to go unnoticed, and incorrect data predictions.
On the other hand, when you have the right tools to manage your inventory well, it can accelerate your picking, help you gain insight into your fast and slow-moving SKUs, and streamline your floor operations.
There are three crucial rules for any warehouse manager when it comes to inventory:
Now, these rules seem pretty self-evident — but they're not always easy to follow. With a bit of upfront work, though, they are achievable: we've honed them over years of experience at Infoplus.
For Rule #1, the key is planning ahead and predicting trends. In the past, customers would have been fine to wait out a backorder of inventory due to high demand. That's no longer acceptable. Now, it's 24-hour delivery or bust. (And there's usually a competitor with a passable alternative available quickly if you're in eCommerce.) So you have two approaches to avoid the situation:
Rule #2 deals with overstocking your inventory. A high volume of low-velocity SKUs is a waste of money you may not see again. The best approach is to run as close to the low stock line as possible, using Rule #1 techniques to avoid drastic consequences.
To make all that work, you need Rule #3: Have accurate inventory data. Exactly how much do you have, and what state is it in? What data are you basing trends on? Real-time, comprehensive data is the key to making these rules work for you.
Let's say you're starting to figure out the whole "how much should I stock" equation. It's time to iron out a few other common mistakes.
The point here is inventory management upgrades aren't just about the end goal of stock balance or efficiency. Make sure each new process fits into your inventory workflow along the way.
Now that you've identified and optimized the common mistakes in your warehouse, you can take inventory management to the next level. That means revamping inventory best practices in your warehouse, like receiving, picking, and shipping methods, for unprecedented efficiency.
A few options to get you started include:
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