Inventory management can be rough even in the best of times. Ideally, you want to gain actionable insights into your inventory while maintaining strict control over it in real-time. Inventory management is vital to any organization, especially if the company goes through multiple sales channels or specializes in different types of products.
In transit goods, overstock, raw materials, in progress goods, and finished goods are all different types of inventory that need to have some oversight. Doing things manually can be a significant source of pain or worse, poor tracking of your inventory.
Using Inventory management software serves an integral function in this situation, making it the ideal means by which you can manage your inventory effectively, save money, and prevent risk throughout the organization.
Types of Inventory Management
Managing inventory is pretty complex. Order processing, fulfillment, and reducing redundancy. When talking about inventory management, it’s likely you’ll see concepts like Anticipation inventory, Finished goods inventory, and Just in time inventory come up.
A pivotal role of an inventory manager is being able to understand what’s required in any of these inventory scenarios. There are other types of inventory as well. These include:
- Raw materials
- Works in progress
- Finished goods
- Packing materials
- Inventory in transit
- Overstock
- Maintenance, repair, and operations inventory (colloquially known as MRO)
Some of them fall into the manufacturing category while others fall into the merchandise category. Regardless of your business, industry, or suppliers, the ideal inventory management system should be able to handle any type of inventory logistics your company requires.
Challenges in Inventory Management
As with any aspect of running a business, inventory management is replete with unique challenges. A talented, multifaceted manager is already equipped to handle most of what the business world throws their way, but sometimes there are challenges that require more finesse.
- Fraud
- Maverick spend
- Stockout
- Inaccurate data
- Poor visibility
- Non-digital documentation
- Supply chain issues
- Ordering issues
- More competition
- Changes in how the product is packaged
- Overstocking
- Theft/inventory loss
- Communication problems
- Software that can’t keep up
Overcoming inventory challenges means implementing software solutions and working diligently to ensure things run smoothly.
Look For Insights
In any business endeavor, analytics and insights provide the basis for most decisions. Optimizing inventory is the name of the game here. Part of using insights optimally is keeping your vendors in check.
Suppliers and vendors can be lovely to work with, but sometimes they might not hold up their end of the bargain when it comes to services rendered/goods supplied. Inventory management insights can help you trace when a vendor is responsible for an inventory-related issue. Late deliveries, damaged goods, or myriad other problems that are usually caused by vendors should not result in invoices being paid out.
The issues need to be identified and fixed as part of the contract/relationship you have with the vendors. The same goes for obtaining support for your inventory management. Flagging shipment issues or transit problems are a big part of the role, so understanding what’s happening with your inventory is helpful in that regard.
Sharing the insights you glean with your team also empowers them to perform well, maintain tighter control over inventory, stop inventory shrinkage, and hopefully predict what future issues might come up. Consider using mobile apps and software to enhance communication, along with your inventory management system.
Reduce Spend Risk and Wasteful Spending
Spending risk and wasteful spending can be big problems in inventory management. The inventory control software can stop these problems at the source. By giving you a clear line of sight into vendor relationships, inventory (both on-hand and in-transit), and stockroom management, you can keep tabs on wasteful spending while simultaneously reducing risk.
Knowing what you have in stock means you won’t waste money re-purchasing things you already have. It also stops excessive amounts of stock from piling up in your stockroom. Monitoring your stockrooms contributes to lower storage and handling costs as well, with the opportunity to optimize storage and movement throughout your entire inventory.
Use Inventory Management
Inventory management systems come in all shapes and forms. Some companies might use the old paperwork method, where everything is tracked manually. Others might use a system of spreadsheets or a management system. For the best results, using powerful inventory management software gets results fast.
Inventory management keeps track of inventory, provides visibility into your stockroom management, helps guide stock replenishing, and minimizes costs. It also makes all of your purchasing available in a single location using Punch-Out guides, which ends up streamlining a lot of basic purchases that are pre-approved or blocking purchases that are not approved.
Read Also:
- Top 10 Best Inventory Management Software for Business
- 5 Reasons Why Your Warehouse Is Costing More Than It Should
- Top 10 eCommerce Reports Every Store Owner Should Follow For A Successful Business
Author: Anees Saddique
