Any business that stores their products in a warehouse or fulfillment center needs some sort of inventory management system. Without a proper strategy in place, you will likely be losing money, time, and ultimately making errors and getting customer complaints. Inventory efficiency can be a significant factor in is to drawing more customers to your product, because what we call an efficient inventory management system, the regular public calls fast and great service. If you want to have a positive brand reputation, you will need to provide exceptional service at top speeds—after all, this is what customers expect. Here are eight strategies to help you solve common inventory problems to ensure better product availability, customer service, and efficiency across the board.
Determine the Problem Areas
Before you begin to look at possible solutions, you must have a full understanding of what your unique inventory problems are. Begin with the idea that every aspect of your inventory system and fulfillment strategy is a problem. Start eliminating the systems that have a viable financial reason and work from there. List all the categories of your inventory problems that signify big losses, including obsolete material, overstock, and defective material. Once you find problem areas, be sure to establish sufficient corrective action.
Invest in a Bigger Team
If your business is growing and you are still trying to make it work with a small staff, it may be time to invest in a larger workforce. The more rushed and overworked your employees are, the more likely they are to make mistakes and be less efficient. To meet demand and ensure your employees are working their best, you need to consider hiring more workers. However, hiring employees isn’t cheap. Another option is to partner with a third-party logistics provider (3PL) that already has the warehouse staff, technology, and systems in place to help your business thrive.
Invest in Software
Another alternative to hiring more employees is to choose a software that can take over some of the manual processes you run. Some software can help you build a more automated inventory flow and increase your efficiency. One option is an inventory management system (IMS) that collects data from sales and inventory counts. As your warehouse staff scan each item into the system, the IMS will update your stock levels. An inventory management system like eFactory will allow you to run inventory reports, even schedule them to come to your inbox at the same time every day.
Avoid Dead Stock
Dead stock includes items that can no longer be sold, items that are out of season and style, and items that are irrelevant. Improving your inventory management will help you create processes to avoid dead stock and find solutions for how to get rid of it so you can make the most of your warehouse space.
Save Money on Storage
For many businesses, warehousing is a variable cost that changes based on how many products are in storage. Storing too much product at once or finding out you have multiple products that aren’t selling well means you are paying more for your storage than you need. Avoiding this can help you save money and invest it in other important areas.
You can gain a better idea of how much you have in stock and how well certain items are selling by doing regular auditing. By relying on your software and reports from your warehouse, you can make accurate predictions to improve your operations day by day. Here are 3 methods:
- Physical Inventory: You can physically count all your inventory at once at the end of the year or every six months. This is good practice for accounting and filing income taxes, and it give you an accurate number of what you have in your warehouse. It can be extremely tedious, however, if you have large or multiple warehouses.
- Spot Checking: This method is a bit more time-effective—you choose a product, count it, and compare it to what you see on the software or online. Fast-moving or problematic items are usually priority with this option.
- Cycle Counting: Another way to audit is doing a cycle count. Instead of counting all your inventory at the end of the year, you spread it out throughout the year. Each day, week, or month, you check a different product on a rotating schedule.
If you haven’t added this to your supply chain, now is the time. You should consider investing in a quality automated inventory system to remove tedious manual processes and boost efficiency in your inventory management processes. There are a few options for you to consider, including an enterprise resource planning solution (ERP) or warehouse management system (WMS). These systems provide visibility of your inventory at every stage as it moves along the supply chain. With barcode technology, you can gain real-time data about every item in your warehouse, to make informed decisions about what you have in stock, when you need to restock, and when to stop ordering an obsolete item.
Partner with a Third-Party Logistics Provider
Your business can be far more successful if you have a sturdy inventory management solution. Even if you are a startup and want to focus on your sales and marketing, your inventory management must be impeccable to ensure you deliver what your customers want. By teaming up with a third-party logistics provider, you can gain access to robust warehouse and inventory management software. These companies are equipped with the tools you need to manage your inventory, get your products shipped out on time, and keep your customers happy.
Dealing with inventory and different ways to store and manage it can be a constant problem for any ecommerce business. By implementing the strategies listed above you can simplify and troubleshoot the process to make it much easier to handle and manage.
If you are considering partnering with a third-party logistics provider to help manage your inventory we would love to hear from you. Send us a note to connect about how DCL Logistics can help your company. You can read DCL’s list of services to learn more, or check out the many companies we work with.