Inventory management is one of the biggest headaches that warehouse managers and supply chain professionals have to deal with. However, the following four tips will help anyone successfully streamline a large inventory.
Inventory Management Software
Historically speaking, many companies used Excel spreadsheets to track and monitor their inventory. However, spreadsheets are not effective and accurate ways to manage large amounts of inventory. Warehouses and organizations with large inventories simply cannot function without a modern inventory management software system that provides real-time updates, standardized processes and centralized information. Inventory management software allows management to pull customized reports at any time in order to identify, analyze and solve problems. Keep in mind that software programs centralize both demand and supply data, so management can quickly find available suppliers and warehouses with space to ship items.
Utilize Safety Stock Levels
Inventory management software programs have embedded statistical formulas that can produce accurate sales forecasts that are used to predict stock levels for all inventory items. Besides forecasting sales, inventory management programs will have customized minimum in-stock counts for every item and supplier. Even better, inventory management programs can automatically order items in high demand from trusted suppliers. However, it is important to have a professional relationship established with suppliers who ship items that are in high demand. Otherwise, unscrupulous suppliers may simply over ship items that they are trying to remove from their own inventory.
Micromanage Target Items
Not all inventory items are created equal, nor should they be treated equally. Items will all have varying costs, valuation methods and consumer demand. The inventory management system will be able to properly track every item’s pricing and lead times. However, most warehouses assign their items one of three categories, the top being the most expensive, highly demanded items and the bottom being the most common or cheapest items. Therefore, warehouse managers should pay more attention to the most expensive and important items that directly impact revenue and costs.
Vendor Report Cards
Warehouses and organizations with large inventories depend on reliable and honest suppliers to deliver their products in a timely manner. However, there are always certain suppliers who struggle to be on time, delivery accurate shipments and even submit accurate invoices. Therefore, management should consider regularly reviewing supplier performances. Based on their findings, management can reward high performers with more business and reduce business to poor performers. If necessary, management should consider ending their contractual partnership with suppliers who consistently fail to perform well and cooperate with the company. Eliminating the poorest performers will automatically help streamline inventory operations.
In closing, streamlining a warehouse is a continually challenging job of communication and coordination. However, it can be accomplished through inventory management software programs, focusing on items in high demand and regularly assessing vendor performance.