Developing a strategy to tackle inventory management, and developing an inventory system, is not as difficult as it looks. Keeping your good resolutions to manage your inventory better is what’s tricky. There will always be pressure to ship things quickly. Taking the time to develop a strategy for inventory management and a system to track and monitor inventory enables you to ship faster without making costly mistakes.
What Is Strategy?
Strategy can be a tricky concept for some. It’s often mistaken for tactics, or how something is done. It’s actually the “why” approach to a project—why should we do this rather than that? Why is one way better than another?
An inventory management strategy takes into account inventory flow from start to finish. It also takes into account the efficiencies of shipping systems, moving goods to the warehouse without incident, excessive costs, or mistakes.
When your strategy encompasses this, you’ll have a better system in place and you’ll achieve tighter control over your warehouse.
The Importance of Data Collection
Ask anyone developing a strategy what the most important contribution to their strategy is and they are likely to responds “facts!” Facts and data are two important tools to develop an inventory management strategy.
To gather accurate data, you need a system such as Sage 100 ERP or Acumatica linked with your warehouse system. Scanco Warehouse for Sage 100 ERPand Scanco Warehouse for Acumatica draw upon the same data source contained within the ERP system so that any information obtained on your inventory is accurate. When you have accurate information, you can use it to manage your warehouse more efficiently.
Collecting data is the first step to a sound strategy. Review item-based warehouse data as well as picking, packing, shipping accuracy, time from order to shipment, mistakes and error rates, and other data. From this data, you will be able to paint an accurate picture of how well your warehouse is running. Then, when you know the gaps in your system, you can develop a strategy to counteract the gaps and improve performance.
Warehouse Management as Part of Customer Satisfaction
Every transaction through your business represents an opportunity to keep or lose a customer. If the order proceeds smoothly and ships quickly, customers will be satisfied and return for more. If there are mistakes or delays in the order, you may find disgruntled customers who seek better service from your competitors.
Movements throughout your warehouse can be viewed like transactions. Each transaction represents a step that, if improved, can improve customer perceptions of your business. When viewed this way, it becomes apparent how an inventory management system or a warehouse strategy can improve your business.
Replenishing bins is part of warehouse life. As bins, pallets, and shelves empty, workers must notice and refill them. However, system-directed refills or automated replenishment systems reduce the chance that someone forgets to refill the bin.
In system-directed refills, alerts move into the system once inventory counts fall below a certain level in a bin. Barcode scanners can be used to automatically update inventory counts every time an item is scanned out or into the bin. With this method, information is relayed from the barcode scanner to the ERP system, which then sends a warning message to the appropriate employee that bins must be refilled. It can also be set to alert when items are low and need to be reordered.
Incorporating system-directed refills into your inventory management strategy reduces out of stock errors and time delays to order fulfillment. Improving just this small aspect of your system can boost customer satisfaction by reducing backorders.
Are You Ready for a Better Inventory Management System?
Better inventory management systems start with the right software. Choosing an ERP system such as Sage 100 ERP, Acumatica ERP, or others and using software such as Scanco Warehouse that integrates warehouse actions with ERP data is a great step to improving your systems. With the right strategy in place and better systems, customer service can be improved to increase retention and sales. It’s a winning prospect, and it begins with Scanco. Scanco offers advice and services to help you build an inventory strategy and support it with the right tools.