Last week we took a look at how inventory is like cholesterol. Too much bad inventory will clog up your organization, but you’re in trouble if you don’t have enough good inventory in order to keep everything up and running. Like cholesterol, inventories need to be managed to maintain a healthy business. Implement inventory management software allows you to keep track of inventory coming in and going out and find the healthy balance between good and bad inventory.
Here are three ways the right inventory software can help you achieve inventory management:
Assess Demand Planning – Demand planning is predicting how much stock is required and how many products your company will sell in the future. Effectively managing inventory requires accurate demand forecasting. The more accurate the forecasting, the less on-hand inventory a company has while still being able to meet customer needs. Take time to assess your demand planning process and make sure it is up-to-date with your business processes. Many inventory management systems are able to help with demand planning.
Work on warehouse organization – One way to optimize you inventory is to learn how your parts and products interact with one another and place them close together. If two of your products are typically ordered together, placing the products near one another makes picking easier and helps keep bad inventory low. Inventory management software is a big help when it comes to figuring out how your products interact with one another.
Determine stock level requirements – Inventory software will help to give your company a clear understanding of the average cycle stock and safety stock. Since safety stock is a reserve stock that is there to protect your company from running out, the amount of safety stock should be limited. Your inventory software will update levels so you won’t run into problems of having too much safety stock.
Maintaining healthy inventory levels requires a lot of work and while using an inventory tracking software is not a quick fix, it will make managing everything easier.