Strategic inventory management is key to the success of any business. As a placeholder for cash, it either represents profit for your business, or it sits in a warehouse costing valuable resources to maintain. Inventory management goes beyond checking an itemized list from time to time. With so many details, strategically managing inventory can quickly become an overwhelming task.
There are significant benefits to strategically handling on your current inventory, instead of just checking a list. Here are three primary questions to ask to achieve this:
- Am I eliminating spoilage?
Avoiding spoilage is the most straightforward inventory management practice. If you are stocking perishable goods, itis key to sell the stock that will expire first. A simple first-in-first-out technique can ensure this in the warehouse. By organizing your shelves so that the oldest stock is the first shipped out, you can reduce regularly throwing away expired stock.
- Am I liquidating dead stock?
Seasonal and excess inventory can quickly take up space and time. Valuable space is taken that could be used for products that are moving more quickly or frequently. By moving your excess inventory to another location or by removing it by some other means, you will be making space for items that are in higher demand. These steps will ultimately drive down costs, enabling you to better meet customer demand.
- Do I keep up with market demand?
Demand auditing is a tactic that must be done periodically, not just once. To keep high-demand items readily available, you need to understand what your customers are buying and when. However, managing your market’s demand is a delicate art that can be tricky at times, and is continuously evolving; therefore, frequent evaluation is imperative. Understanding this flow is key to having an efficient, profitable warehouse.
Though these concepts are simple, getting this data and insight can be almost impossible for companies. Therefore, the easiest and most efficient way to confidently answer the questions above is by implementing an effective inventory management system. With its easy-to-use functionality and all-inclusive inventory management dashboard, Microsoft Dynamics 365 can help you gain insight into your inventory costs and perform analysis to calculate your demand. This will allow you to get your warehouse into top shape.
Rand Group is a Microsoft Gold Partner with years of experience helping clients manage their warehouses. Rand Group is the partner you need to make your inventory management project successful. For more information, go to www.randgroup.com.