IMPROVE INVENTORY MANAGEMENT WITH BETTER PLANNING AND BETTER TECHNOLOGY
Inventory management is crucial for keeping your customers happy and maintaining an efficient supply chain. It's also a common source of frustration for growing businesses.However, once you've perfected your inventory management strategy, your business is in a position to scale quickly. The following tips will help get you there.
#1. CHOOSE YOUR SUPPLY CHAIN PARTNERS CAREFULLY
The supply chain partners you work with can make or break your business. Not only do you rely on them for operations, but their actions can influence how customers perceive your brand.For example, if your 3PL partner is slow with order fulfillment, your customers aren't going to be happy. If your product manufacturer isn't consistent with quality, You'll face delays and potential shortages in inventory.Our advice is to stick with supply chain partners that have a proven track record. Mediocre companies come and go, but only the consistently reliable companies stand the test of time.
#2. MINIMIZE HUMAN ERRORS THROUGH AUTOMATION
We all make mistakes. That's why computers are quickly replacing us for tasks that require speed and accuracy.Automation is one of the key strategies for efficient inventory management, and EDI technology lays the foundation for automating your entire supply chain.EDI automates inventory management by:
- Replacing manual data entry and paper-based tasks
- Seamlessly exchanging business data to shorten the order-to-cash cycle
- Monitoring inventory in real-time
- Shortening the lead time for inventory replenishment
#3. PLAN FOR NATIONAL AND INTERNATIONAL HOLIDAYS
If you operate in an industry affected by national holidays, you probably already know to plan ahead. For example, retail businesses typically start stocking up on inventory in October to prepare for the Christmas shopping season.However, a common mistake is not anticipating international holidays, as well. A simple solution is to talk with your international suppliers and find out:
- Dates for national holidays
- Busy and slow seasons
From there, you can create a calendar that syncs the holiday schedules of all vendors in your supply chain to prevent any delays before they happen.
#4. ALWAYS OPTIMIZE
Inventory management optimization isn't something you do one time, and you're done. It's an ongoing practice that steadily improves your efficiency over time.INVENTORY FORECASTINGTo ensure orders are consistently fulfilled on time, companies use inventory forecasting to predict how much of which inventory will be needed in a given period. Depending on the size of your supply chain, and where each of the partners is located, you can determine how long your forecasting period needs to be.Implementing EDI will allow you to track base demand and monitor trends to ensure you're re-order points make the most sense in your particular supply chain.
The time it takes from when you place an order to when your inventory arrives is known as “lead time.” Lead times account for expected delays that become predictable with time.When you make adjustments in your supply chain, such as partnering with a new supplier, your lead times will likely need to be adjusted as well.Another benefit of using an EDI service is the ability to monitor all of this information in real-time and have your lead times automatically adjusted accordingly. Lead time optimization prevents you from wasting resources on unnecessary inventory and from running out of stock, which delays orders.
#5. MOVE TO THE CLOUD
Business owners were skeptical about “the cloud” at first, but today it's one of the most valuable technologies that companies rely on.The benefits of cloud-based inventory management:
- Real-time updates available 24/7
- Access to information from anywhere in the world with an internet connection
- Cloud technology is more secure than ever before
- Allows seamless integration between multiple vendors and business partners
Cloud technology is fast, reliable, affordable, and it completely replaces a broad range of software and hardware that you would normally be responsible for purchasing, configuring, and maintaining. It's a no-brainer for inventory management.A cloud-based EDI service creates a framework for smart inventory management and an effective supply chain overall.