Network inventory management is a system whereby stock and assets are tracked as they enter and leave a destination, whether it be a warehouse, wholesaler, or final point of sale.
The nuts and bolts of inventory management are the same, but the complexity changes depending on the size of the entity managing the inventory. For example, inventory that comes directly into a retail location onto store shelves has a fairly simple system of inventory management.
However, a large multi-department wholesale distributor may have multiple sources of inventory, maintain records of that inventory for a considerable period of time, before being broken down for distribution to points of sale locations. The management system for this scope of inventory will be much more involved in this case.
Inventory control is the process of maintaining minimal inventory while maximizing the timeliness of product delivery to customers and leaving them satisfied by your performance.
Several methods exist for obtaining maximum inventory control. From simplest to most complex they are stock review, just in time, and ABC methods. Stock review is the easiest to perform, and it is most appropriate for small businesses. The advantage of it is in its simplicity. The disadvantage is that it’s a time consuming process and it’s highly dependent on the skills and know-how of the person conducting the inventory review.
Just in time inventory control is a little more complicated, and heavily dependent on predictions of future consumer behavior. If you have a good handle on when a specific product will be in higher demand you can set it up in a way that items are ordered precisely when you know customers will want them. If your market segment is more unpredictable however, you may be left with some unsatisfied customers.
Even more complicated is the ABC system which categorizes goods based on their value/quantity ratio. If you operate a business that sells fewer higher value goods, you’ll want to keep a smaller quantity of goods on hand. And, if you sell more lower value items, you’ll need to keep more of those goods in stock. Therefore, you classify all of your products into levels of value/quantity so that you maximize the value of your overall inventory, maintaining the right amount of items based on how quickly they sell.
Most entities from the smallest to the most complex will take advantage of some form of inventory management software. The software can be composed of a simple spreadsheet design, or it can be complex form fields on a database driven system that fully integrates with accounting and invoicing software, among others.
Inventory management software utilizes key identifiers to keep track of each asset entering and leaving the business entity such as date of entry and exit, lot or batch numbers, serial numbers, quantity, etc.
The types of software available are numerous, and many are highly customizable according to the exact needs of your business. These software packages can be stand alone or cloud based. Most of them integrate cost into each unit, so accounting has an accurate idea of the inventory value.
Efficiently running a business requires optimizing your inventory management by keeping just the right amount of inventory on hand that frees up capital and keeps the customer happy: enough inventory to get to the customers, but not too much that your money is tied up in stock.
Inventory Management Software that is appropriate for your company’s needs and applied effectively can cut your inventory investment by 25 to 35%, while maintaining high customer satisfaction. Choosing the right inventory management software for your business is essential, but then implementing the software expertly and efficiently is absolutely crucial to decreasing inventory while increasing customer satisfaction.
Proper inventory management can make or break your business, especially if your market is particularly competitive. Moreover, if you’re trying to grow your business while competing with others, highly effective inventory management may be your only lifeline while building out your business.
As your business develops and changes, your inventory management requirements will change too, usually becoming more complex. Hiring an Inventory Management firm to oversee your inventory allows your business to concentrate on its core function instead of spending excessive time maintaining optimal knowledge about the inventory control system being used at hand.
Meanwhile, your company can rest easy knowing that an expert in inventory management is continually assessing and reassessing your needs and managing your goods in real time in a way that optimizes your working capital and minimizes unneeded supply while still keeping timely delivery to the customer their number one priority.
The dance between cash flow and inventory can be a highly nuanced one, taking sincere coordination and movement at just the right time. An expert management system taking advantage of the most efficient software can free up extra cash flow, which can get pretty tight sometimes for smaller or growing companies.
It can also free up valuable warehouse space from excess inventory that you may not have identified using in-house solutions. It allows you to pay more as you go instead of paying for it all up front and hoping for the best.
If you have questions about the efficiency of your inventory, you may want to consider having an expert consultation to evaluate the effectiveness of your operations thus far. If your inventory management is spot on and the learning curve is not high to implement that management, the in-house software solution may be the choice for you.
If you run a relatively complicated operation involving many warehouses of goods in multiple locations, and you could benefit from optimizing capital, consider outsourcing your inventory management system so that you can move your products in the most efficient manner possible, keeping the minimal amount of inventory on hand while still maintaining the highest degree of customer satisfaction possible. Which will also help with telecom provisioning.