In this new series, we take a closer look at various infographics published on our website. The first in line is “So you want to Manage Your Inventory ?“.
Inventory Management refers to the process of handling the constant flow of units going in and out of your stock. It includes ordering, storage and the use of items by a company in the production and sales cycle. The need for inventory management commonly has various underlying goals to it:
- Be pro-active and identify problems across the supply chain before they occur
- Avoid missing out on a sales opportunity due to under-stocking
- Conduct trend analysis to look for improvements and plan for the future
Ultimately, you want to reduce costs and increase profits . After all, the bottom line will help your business thrive. However, before you streamline your inventory operations in order to maximize profits, you need to know:
- Quantity on hand at any given time including product information
- Inbound orders, including supplier details and ETA
- The amount you owe to your suppliers
- Number of orders placed to identify your fulfillment needs
- When to replenish your stock and by how much?
Having all these answers is key before you move on. If you don’t, it’s never too late to gather the data now. Employ an Inventory Management System to collect and organize all the information. In fact, they should offer full visibility across your supply chain. You can expect even more things from it:
- Track and Trace: Track and trace your inventory as it moves from the plant to the warehouse and to your customer. See all this information in real-time with your IMS
- Collaborate with suppliers: Work with your suppliers to ensure that you have the right amount of stock at any given time. Avoid overstocking and under-stocking.
- Replenishment: Notify the appropriate party when you’re low on an item and place an order for the goods that you need. Automate this process by setting inventory paramters.
- Data and Insights: Receive, collect and organise all the data in one central location. Generate reports and insights to make best decisions.
- Flexibility: Customize your system to meet your needs and requirements. It should scale and adapt to your business as you grow in size.
In conclusion, the infographic sums up the importance of managing inventory pretty well by saying “Managing your inventory matters, because inventory is cash in disguise. Why wouldn’t you want to know how much you have?”