Is Your Inventory Getting on Top of You?
Success in the supply chain industry hinges on warehouse and inventory efficiency, and operations can go south quickly if proper procedures aren’t put in place.
The notion of inventory management can be overwhelming. It doesn’t matter if the warehouse is big or small, managing inventory takes precision, time and patience -- as well as a healthy dose of new technology.
But the worst thing a supply chain company can do is let its inventory pile up and become too much to handle because, ultimately, a poorly run inventory management system can have a major impact on cash flow.
So how does a company avoid dead stock, spoilage, and unnecessary storage costs? The simple answer: By establishing effective inventory norms early on.
Here are a few ways companies can improve their inventory management and keep their stock in check:
Always Remember FIFO: It’s a simple trick, but extremely useful to consider when managing a warehouse. FIFO, or First-In First-Out, reminds supply chain industry leaders to move their oldest supplies first. Why? Because if packages, boxes or stock spend too much time in a warehouse they often fall into the forgotten category. Not to mention, the longer stock stays on warehouse shelves, the more likely boxes will become worn out or packages will become outdated. Trends change quickly, so it’s important to move stock quickly, as well.
Make Sure to Stay on “Par”: When it comes to golf, a par golfer is a successful golfer, and in a similar vein, keeping “par levels” for inventory stock can save time and money. Essentially, if a company establishes a minimum amount of stock required on their shelves at all times, it’ll make it easier to know when it’s time to restock and avoid accidentally adding too much stock. If a certain stock slides below “par,” then any warehouse employee on hand will, at the very least, know the minimum amount that needs to be purchased to satisfy consumer needs.
Establish the ABC’s of Inventory: An efficient way to improve inventory management is to understand warehouse data. And a good method to obtain said data is by dividing inventory stock into specific groups. Warehouse managers can place items into different categories, such as A-B-C, in order to determine their value. It can be extremely useful, and invaluable, to understand which stock sells the most, is most profitable, and has the highest turnover rate.
Keep an Eye on Trends: One of the most interesting, and difficult, things to do in the warehouse and supply chain industry is follow product and packaging trends and predict what will emerge as a popular item in the future. This requires a lot of data analysis, but by evaluating market trends, growth rates, and yearly sales, industry leaders can stay on top of what consumers want most.
Useful Contingency Plans: Intuitively, contingency planning is rather difficult to prepare for, but there’s nothing quite as effective as establishing proper procedures for unforeseen events. The best practice to keep is to plan for unexpected growth, or disappointment. The worst thing to do is ignore the unexpected. Stock sales could grow rapidly, shelves could run out of room, slower moving products could take much needed space, and suppliers could run out of product -- among other things. Planning ahead might not ensure success, but it will provide the necessary precautions to stay afloat.
Of course, while all of those points are important to remember, there are many things supply chain companies can do to keep from being overwhelmed by inventory. There’s always the simplest solution, which is to plan an efficient warehouse layout and properly educate employees on warehouse procedures; this is also a way to avoid accidents and increase safety.
But, above all else, it’s crucial for warehouse and supply chain companies to adapt with the 21st century, which means integrating new technology. With consumer demands at an all-time high, warehouse management is difficult for even the most veteran companies. By integrating management software, such as the STS WMS360, companies can save on time and avoid the trouble of dealing with tedious tasks.
Advanced software, like WMS360, allows industry leaders to fully automate their warehouses and focus their attention to more important duties, like establishing strong supplier relationships. Warehouse managers can customize the software to their preference, make operations as transparent as possible and limit export and transfer headaches.