What is the best way to manage inventory and replenish inventory?
Smart Inventory Management
Q: What is the best way to keep on top of my inventory and make sure I am replenishing my levels?
A: Staying on top of your inventory is crucial for providing sales to clients and to make sure all of channels are updated with available inventory. A thorough analytic strategy of replenishment is recommended to keep your inventory current and your channels updated.
The financial leader of a business, typically the CFO, will work closely with the logistics manager to ensure that stock levels are sufficient and an excess of capital is not tied up in inventory. Successful businesses rely heavily on inventory management and accounting software to make accurate projections and as to when supplies will be diminished and inventory needs to be replenished. There are several factors that you will want to take into account when determining when is the right time to re-order or manufacture new stock.
Analytics of when a PO is placed versus when product will arrive should be kept. Some suppliers might be overseas or rely on different delivery systems that might take more or less time to deliver. This is a statistic that should be taken into account to ensure levels are kept topped off and purchase orders are submitted on time.
Bare Minimum Inventory Levels
Demand and consumer sales can be highly variable are rarely predictable. Maintenance of an emergency minimum stock can save you from lost sales and revenue. Selective Inventory Control (SIC) or ABC analysis can be used to project what this level should be. Know your maximum and minimum inventory levels. Educated projections will aid you in knowing what these levels should be. Once again reliance on a solid inventory management system and accounting system will ensure that these levels will maximize your sales and minimize your capital outlay.
Be Mindful of Overstock
Detailed analytics of what product is moving and what hasn’t moved will help to ascertain what products are overstocked based on maximum and minimum levels.
Back Ordered Inventory
Having no stock of an item can be disappointing to your customers and discourage brand loyalty. Analytics with a solid inventory management system and accounting software can save the day by letting you know the minimum level you can have by taking in the lead time of fulfillment of a PO for said product.
Inventory that is obsolete will need to be purged from your warehouse in order to make room for inventory that is actually generating revenue. Solid forecasts generated by the inventory management system or accounting software can prevent an excess of inventory and stock levels that become obsolete.
In closing reliance on a robust inventory management and accounting software to generate analytics will allow you to know; when to and when not to order more inventory, how much inventory should be ordered, and vendor performance.
Scout provides the essential inventory management solution and has several integrations to accounting software platforms. Contact us to learn more.