Inventory management is a serious topic. Inventory management strategies are so important that it can make or break the profitability of a business. Every business which has its capital vested in inventory must devise effective inventory management strategies to improve profitability. But how does one do that given the many operational hurdles present in everyday routine.
Thankfully, with the advent of technology there are several online inventory management system available that improve operations than ever before. In fact there is no dearth for such systems that organizations can experiment with various types of inventory management strategies as they wish. Here are 8 such retail inventory management strategies to improve stock management effectively.
1.) Harness The Power Of Digital Solutions:
Charting out inventory management strategies begins with establishing a good digital control over stock levels, procurement and allocation. Although manual physical checking and tracking is essential for inventory management, it is highly prone to error and misjudgement. Even for a small business, there will be a long list of categories and subcategories of inventory that need to be tracked down to the last count with perfection.
An automated multi channel inventory management system will save time by avoiding manual errors and by providing real-time information about inventory levels, pending orders, etc.
2.) Integrate Field Sales To Sales Processing Systems:
Field sales is still in existence and will continue to be so for a long time to come. It is yet to become passe. Field sales still continues to be a major source of leads for businesses that are serving customers directly. Connecting field sales leads directly to a SaaS inventory management system is no longer a luxury but a necessity for businesses.
3.) Make Use Of Cross-channel Inventory:
“The best and cheapest way to serve customers is to have optimal inventory levels in your fulfillment centers,” opinionated Castaldi. The US based retail chain of departmental stores recently went for a major overhaul of its inventory management. The retail chain started sharing its inventory across multiple stores and cross-channels to cut down piling up of unwanted stock levels. To achieve this, the store chain set up regional warehouses from where goods will be dispatched to customers or within stores as and when need arose.
Retail chains having multiple sales channels can embrace of SaaS inventory management to reduce inventory carrying costs and to maximize inventory turnover ratio.
4.) Embrace The Power Of Cloud:
Anywhere, anytime access can simplify inventory management to a great extent. “Cloud-based inventory management systems can provide a more cost effective alternative to a costly on-premise system while providing simultaneous access to users throughout the world,” feels Ricci at LGC+D. A cloud based online inventory management system will improvise since stock data can be accessed consistently and on a real-time basis without any hardware or software restrictions.
Cloud computing enables mobile based SaaS inventory management which will be a boon come true for businesses with inventory storage locations spread across multiple geographical locations.
5.) Centralize Data And Order Management:
It is common for organizations to have separate entities for different sales sources like online, offline, retail outlets, B2B sales, etc. However, the online inventory management system and order processing system must be necessarily be kept centralized and under a single control. This will help in establishing proper control over inventory even when multiple businesses are using the same stock simultaneously.
Managing inventory and orders from a single source of centralized data will give the ultimate inventory control a business with multiple sales outlets can ask for.
6.) Establish Consistent Product Description:
The prime reason why inventory records become unreliable and infested with duplicate entries is due to the lack of a uniform way of entering product description in the inventory management module. Inventory management becomes a breeze through if the product descriptions, material codes, etc. are created with uniformity. Using bar codes and similar standard forms of inventory tracking methods will aid in fail proof inventory management.
Establishing consistent product descriptions should be made an integral part of the organization’s strategies for improving inventory management. It will help improve the speed and efficiency with which inventory tracking can be carried out.
7.) Rely On Periodic Reports And Analytics:
Setting stock levels based on past trends and forecasts are imperative for business profitability. Stock levels should be determined based on lead time taken by suppliers for delivery, stock movement, weekly/monthly/yearly sales, carrying costs, taxes, octroi and other related costs. Analytics of these costs play a vital role in efficient inventory management.
Ensure that your business relies on a system of inventory management assisted by reports and analytics for optimal inventory utilization.
8.) Empower Employees With Mobile Portability:
“Beyond the obvious advantage of having convenient and efficient anywhere access to the inventory system, mobile devices can also leverage their built-in capabilities such as cameras and geo-location to expedite inventory management workflows,” says Kevin Ricci, IT director for LGC+D. Contalog developed a comprehensive inventory and order management system which ensures that businesses are able to accelerate their operations through the use of mobile technology.
With Android, iOS or Windows applications, it is possible to track inventory from anywhere, anytime thues amplifying employee productivity and inventory management manifold times.
To Wrap it Up:
The modern world that is interconnected in all ways makes it easy for businesses to tackle difficult operational challenges like inventory management. The above mentioned 8 ways, if implemented by a business will not only improve, but will transform for good the control a business has over its inventory.