A proactive mindset is the first step towards effective inventory management. Here are some actions you can do to boost productivity, reduce expenses, and enhance accuracy.
- Put in place reliable reception protocols: Accuracy and efficiency on the incoming side are the foundation of effective inventory management. Make sure you received what you requested, whole and undamaged, when vendor shipments arrive. Finding any problems as soon as possible is essential. You will have a short window of opportunity to file a claim once you get an order.
- Prevent mistakes: Create a proactive maintenance program to find any mistakes that could happen inside the warehouse. Organize the program such that the most crucial criteria serve as the foundation for cycle-counting, or proactive inventory audit.
- Create a hierarchy for the inventory: SKUs or SKU categories are usually ranked according to their value, velocity, seasonality, or other importance in an inventory hierarchy. Sort your stock into low movers (C), medium movers (B), and high movers (A). Then, to make sure you can rely on the right frequency, align processes appropriately.
Given that every touchpoint presents a chance for inaccuracy, the frequency should ideally match the frequency at which SKUs are touched. To make sure your program generates the maximum value, you may count A’s every month, B’s every three months, and C’s every year.
- Cut down on product holding time: The cost of goods sold (COGS) increases with the length of time things are kept in the warehouse. to enhance inventory rotations, optimize storage density, and maintain the warehouse’s inventory profit potential. Your COGS will decrease as your turns increase.
- Take into account rotational tactics: For instance, First In, First Out might gradually reduce total inventory expenses. The danger of obsolescence can be reduced by using First Expire, First Out. Implement the proper rotation plan for every area of your company.
- Make use of information networks: By automating and streamlining inventory management and eliminating the need for human decision-making, a strong ERP or WMS may save labor expenses. It’s crucial to utilize reliable, user-friendly solutions that can manage that degree of complexity if your inventory accommodates requests for several sales channels.
- Make use of technology to streamline procedures: Certain procedures can also be enhanced by systems. For instance, a WMS may verify a physical inventory count using cycle-counting. Accuracy is greatly increased by using a supervisory re-count and a double-blind procedure for two-way validation. Accurate order processing, which is closely related to inventory management, may be ensured with the use of sophisticated automation and robots. While maintaining precise inventory in the warehouse, autonomous mobility robots and LED pick/put systems assist in accurately completing orders and getting them out the door.
- Record post-mortem information: Create a procedure for following up once an order ships. In order to guarantee a positive client experience, you want to find out about any problems and fix them as soon as possible. Any disparities or unfavorable results provide information on which you may take action. That data collection is essential since it aids in determining the problem’s underlying cause.
- Take care of shrinking problems: You may spot trends and inconsistencies in the inventory by closely monitoring the data. Over time, this iterative procedure might assist you in managing risk and minimizing shrinkage. It is impossible to ignore inventory accuracy tracking. Monitoring daily metrics facilitates the prompt identification and resolution of issues.
- Create a program for ongoing improvement: Effective inventory management requires a program of continual improvement. Lean approaches may contribute to cost reduction and operational excellence by increasing output, precision, and consistency.