Inventory management is crucial to your organization’s success, especially if it’s operating on a large scale. Optimizing your inventory management can help you save money, save time, and streamline efficiency.
So what are the best ways to accomplish this inventory management optimization?
The Benefits of Inventory Management Optimization
Let’s start with some of the benefits of inventory management optimization. What’s so important about this set of strategies? How does this benefit your organization?
- · Lower operational costs. First, you have the benefit of lower operational costs. Inventory management optimization does require some upfront and ongoing investment, especially if you need to overhaul your existing approach to inventory management. But in exchange, you can operate more efficiently, relying on fewer resources while improving productivity. This should result in a net benefit, reducing the ongoing costs of business operations.
- · Faster delivery time. Smarter inventory management usually leads to faster delivery time as well. Whether you’re coordinating resources behind the scenes or delivering products directly to customers, this is a huge advantage. Getting access to resources even a few days faster, consistently, and across your entire supply chain can help you maximize your productive potential.
- · Happier, more loyal customers. As a result of more consistent inventory management and faster delivery, you’ll eventually cultivate happier and more loyal customers. Regardless of who your target demographics are or what your customer relationships currently look like, virtually everyone should be happier with timelier and more reliable delivery.
- · Fewer complications. Supply chain and inventory management complications can cause wrinkles that ripple throughout your organization. With more efficient, consistent, and touchless inventory management systems in place, you should have fewer complications – and fewer chaotic fires to reactively put out.
Optimizing Your Inventory Management
So what actionable steps can you take to improve your approach to inventory management?
- Hire the right consultants. Businesses of sufficient size and complexity typically have a hard time optimizing inventory management alone; this is partially due to the scope of the project and partially due to entrenchment, which can blind people to the ways that their systems can be optimized. That’s why many of these organizations choose to hire consultants to help them analyze existing problems and find better solutions. Hiring the right consultants can instantly make inventory management optimization easier and more accessible.
- Use the right tools. There are countless tools that can help you practice better inventory management, including straightforward inventory management platforms, IoT-based chips and devices, and AI-powered tools for automation. Assembling the right suite of technological tools can increase your efficiency, reduce costs, and ultimately help you streamline your entire operation.
- Implement scalable plans. Scalability matters, especially if you already have plans to grow your organization in the near future. While it’s important to think through all of the systems and processes that you implement, it’s also important to leave some room for adaptation and changes in the future. When in doubt, future-proof – and don’t overly commit to something that’s not easy to roll back or transform.
- Automate everything you can. Automation is your best friend in inventory management. It leads to greater consistency, lower labor costs, and more efficient operations overall. Not everything in your inventory management can be automated, but automation capabilities have improved dramatically over the last decade.
- Forecast demand as accurately as possible. Successful inventory management is predicated on successful demand. If you’re able to forecast demand with precise accuracy, you can coordinate resources much more effectively. That means you need to spend time and effort cultivating reliable data streams that you can utilize in pursuit of better inventory management.
- Decentralize your inventory across all your fulfillment centers. Generally, decentralization is associated with agility and productivity – and for good reason. Decentralization in your inventory management can come with several advantages. Centralizing your work with one fulfillment center may make some aspects of your management plan easier, but distribution lends itself to much faster delivery and more autonomy.
- Track everything. Track everything you can in the world of inventory management, so you can analyze the data if and when necessary. Ongoing reporting can help you track your progress and proactively highlight prospective issues.
- Analyze and improve. Finally, take the time to analyze your data so that you can continuously improve. Which metrics could stand to be further optimized? According to the data, what are your biggest bottlenecks and pain points?
Better inventory management isn’t going to happen overnight, and it’s not going to happen without investment. But if you’re focused on ongoing inventory management optimization, you can eventually save time, save money, and support a more productive, more sustainable business operation. If you’re not sure where to start, or if you need more professional support, consider hiring a consultant to help you come up with a more comprehensive strategy.
