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5 [More] Inventory Management Best Practices

Back in November, we reviewed five different best practices to optimize and innovate your inventory management processes.

This week, we’re back for part two of our inventory management series, with even more tips and suggestions to bring your inventory management to the best it can be now that it’s 2019.

Let’s continue!

1) Audit and evaluate the systems you currently have in place before you buy new software/hardware/systems.

Technology serves many purposes, and it can be tempting to want to jump on the bandwagon and get the newest, say, ERP system, inventory optimization software, or Internet of Things (IoT) sensors for your organization in order to have real-time tracking and visibility of your products and supplies.

But you may not need to purchase new hardware or software just yet. It’s possible that the systems you have in place are sufficient, but not have been used as well as they could. It’s also possible that with different changes in processes, you can get your desired outcome with what you have in place already.

By auditing and evaluating your current tech stack, you can potentially save your organization hundreds of dollars (not to mention time!).

2) Consider investing in a barcode scanning system.

It’s also possible that your current systems, hardware, and ways of doing inventory management could be improved and that what you have in place isn’t sufficient anymore. For instance, if you’re relying on manual tasks and spreadsheets in areas, new technology could minimize errors and better equip your employees for success.

Investing in barcode scanning/management systems (consisting of barcode printers, barcode scanners, and inventory management software) can provide numerous benefits to your organization. For example, you can have more accurate material management, simplify your processes of purchase and database management, and fully implement “First In First Out” (FIFO) systems.

Also, you can have real-time data about your inventory and thus keep it at a constant level. Furthermore, you can eliminate the problems of material shortages or insufficient storage, reduce costly inventory losses, and give operators immediate control of stock and shipping from cargo withdrawal to delivery.

3) Develop training and onboarding programs to empower your staff and ensure they’re as knowledgeable as possible.

Even if you have the right technology in your facilities, it’s all for naught if your employees aren’t trained well. Without effective training for both new and current employees, you could experience negative consequences like employee dissatisfaction and unnecessary delays.

“For example, in the rush to fill orders in a busy DC, management might not build in proper training for floor associates,” writes Contributing Editor Roberto Michel in a Logistics Management article about inventory management. “So, an ‘extra’ inventory management tip might be the most fundamental….”

By providing proper training to your staff, they will know how to most effectively use their time and have a thorough understanding of your inventory management processes – all of which are necessary for workers on the front lines. Plus, by giving your employees the tools and training they need to be successful, you’re actually empowering them in their jobs.

4) Go lean.

According to the Lean Enterprise Institute, “A lean organization understands customer value and focuses its key processes to continuously increase it. The ultimate goal is to provide perfect value to the customer through a perfect value creation process that has zero waste.”

Adopting a lean approach to inventory management can help you to decrease waste (if not eliminate it altogether), increase turns, and give you the ability to be more adaptable with your inventory. You can develop techniques based on five different principles as outlined by supply chain consultant Charles Intrieri: value, flow, pull, responsiveness, and perfection.

Intrieri points out four specific results of using a lean inventory management approach in your organization:

  • Reduced stock keeping units (SKU) counts and inventory levels
  • Increased use of standards in processes and materials
  • Improved collaborations and a general reduction in the cost of goods sold when compared to companies that do not use lean principles
  • Contributes to the bottom line

In short, the results speak for themselves. Going lean is the way to go.

5) If your distribution centers (DCs) are experiencing omni-channel fulfillment challenges, consider using a distributed order management system.

DCs can sometimes be plagued by omni-channel fulfillment challenges, and one way to remedy these challenges is to invest in a distributed order management system (also known as a DOM).

Roberto Michel, quoting Ian Hobkirk from Commonwealth Supply Chain Advisors, states in his aforementioned Logistics Management article that “DOM’s main benefit… is that properly implemented, it acts ‘as a brain’ for the complex rules you need to apply to orders to fulfill them in a way that meets customer promises at optimal cost – while also adhering to the inventory allocation objectives.”

In a Multichannel Merchant article, author Michael Anderson highlights some of the major benefits of DOMs. You can assemble orders from any of your channels, identify opportunities to cut costs in your fulfillment operations, integrate your internal and external data sources together in one main system, and boost the allocation of your inventory.

Conclusion

Now is the perfect time to start thinking about ways to optimize your inventory management in 2019. We hope that some of the tips in this post help you as you plan your inventory management processes for this new year.

And if you haven’t had the chance, we invite you to check out part one in our two-part series about inventory management best practices for five more tips!


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