Beyond Software: 6 Effective Inventory Management Practices
Posted Monday, February 27, 2012 by Don Kapuscinski
Many distributors are lured to new software solutions based on their promises to help manage inventory. Because inventory is the largest and most important asset for many distributors, managing it efficiently is critical to remaining profitable and competitive. So, it’s no wonder that inventory management is such a driving factor in distribution software selection. However, effective inventory management goes beyond what any software solution can provide. Because any software is only as good as the data that goes into it, you need to implement effective inventory management processes and procedures in order to get the most from your inventory management solution.
According to Jon Schreibfeder, president of Effective Inventory Management, Inc., there are six areas of inventory management where practices and standardized processes within your software solution are the keys to success:
- Getting Control of Your Inventory –Unless you know exactly what inventory is in your warehouse, and whether that material is in a usable condition, you can’t properly determine when to reorder products. You have to control your existing inventory before you can manage your future inventory processes.
- Keeping Accurate Stock Balances – Having accurate, reliable counts of your actual inventory on-hand empowers you to keep your customers happy and saves you costs by helping you avoid the need to over-order.
- Improving Your Forecast Accuracy- Gain the power to do more with fewer resources by accurately forecasting demand for your stock products.
- Managing Effective Replenishment Parameters – Blindly trusting your software solution to help you make replenishment decisions without fully understanding the parameters that are set in your software can cause serious problems. By understanding these parameters, and how they are intended to function, you can replenish your recurring usage stock with improved efficiency.
- Maintaining Stock in Your Branch Locations – Ensure that your branches are all appropriately stocked to keep your multi-location distribution organization performing equally well across all areas.
- Achieving Inventory Analysis Efficiencies – With solid inventory analysis, you can ensure that you are investing in the right amount of the right products to remain competitive. By developing and using a comprehensive set of tools to closely monitor the performance of your inventory, you can achieve more of your goals more efficiently.