Explain Inventory Management Process

A well-planned inventory management method helps you save money and time. If done correctly, it improves cash flow and customer experience. As even more channels offer for sale and fulfillment alternatives are readily available, the importance of e-commerce is also increasing.

To use social commerce, you should make your product easily accessible on even more markets or establish fast commerce gratification; a top-quality inventory management system is essential. In the consequences of a pandemic, this will be necessary to revitalize retail sales and take on the supply chain dilemmas.

With all this in mind, we’ll check out the whole series of options, from managing inventory to keeping an eye on the stock to various inventory management software available.

Inventory Management Vs. Inventory Control

The words inventory control and inventory management are frequently used to refer to the very same thing. They are 2 various terms.

The inventory control procedure concentrates on managing the supply that is saved. In contrast, taking care of supply can broadly cover the entire stock management – from order to shipment.

Regulating inventory includes efficiently storing supplies and decreasing expenses for the warehouse. It’s about attaining stability in stock degrees to ensure that deadstock is not a trouble and getting rid of stockouts. If done correctly, this can save cash and increase cash flow without affecting the customers.

Before you can excel in your business’s procedure for controlling inventory, it’s vital to set up a system for inventory management. To obtain your storage facility operating smoothly, connecting with vendors and enhancing gratification is essential.

The Five-Step Procedure For Inventory Management Process

To enhance your inventory managing procedures, it’s essential to have the fundamentals covered. In this post, we have broken down the 5 crucial steps needed for every inventory management system:

Collect and Inspect Products

The first step in inventory management starts with receiving your orders from vendors. Guaranteeing this is done appropriately is vital for adhering to activities to be as efficient as possible. The first thing to be completed after the order’s delivery is to inspect the product. It is crucial to ensure the product’s amount code and identification number are correct. Additionally, guarantee that temperatures and handling problems are proper for perishables; all products remain in good working order.

Sort and stock items

After reviewing the product, it should be adequately stored in the warehouse and then entered into your leave management system. It’s best to think about how the products are maintained. Slotting techniques for warehouses, such as arranging items according to SKUs and product type, could be beneficial. It is also essential to minimize the distance to top-selling products by keeping them in places that are the most easily accessible.

Accept orders from customers

The next step of the process of managing inventory involves accepting orders from customers. Orders are typically processed through the points of sale (POS), which processes the orders and accepts payment. The POS system could incorporate an inventory management function or integrate it into an inventory management system which allows the information about the order to be reviewed by warehouse employees.

Fulfill package as well as Ship order

After a client has placed an order, the next stage is to efficiently and accurately complete the package and then ship the order. If the second stage of the process was improved, finding and choosing the items in the warehouse ought to be reasonably simple. The most important aspects to take into consideration in wrapping the item are satisfaction of the customer, sustainability and quality. When you ship the item, send the purchaser an email confirmation that provides tracking information.

Reorder new stock

When reordering new stock, it is essential to ensure that the time of new orders and quantity of the goods are in order. Utilizing your reorder point formula, you can reduce the possibility of shortages and dead stock, which can adversely impact your bottom revenue. Specific inventory management systems automatize processes for reordering, which help to reduce time and also prevent human error.

Tips For Optimizing Your Inventory Management

After we’ve covered the five steps of each inventory management procedure, we’ll explore some strategies to optimize your inventory management. If you’re looking to save space and money or impress your customers, there are many ways that you can deploy to manage your inventory more effectively. Here are some of them:

Continue to plan

Controlling and managing inventory ideally is a never-ending project. You must continuously monitor outcomes, monitor stock levels and look into any issues. you are able to alter your management strategy based on the data you collect.

Constantly adjusting the safety stock levels and replenishment cycles is essential. It is also essential to be aware of global events, supply chain news, and changes in consumer behavior to allow you to adjust your strategies as needed.

Make sure that priority products are first

The management of all your inventory simultaneously is a huge undertaking. Therefore, you must first identify the most critical inventory and optimize the processes around their need.

It will likely mean focusing on the most popular products in the upcoming advertising campaigns. Statistics from 2020 show that the rates of stockouts for the top-selling items typically range between 8 and 12 percent, which is an area to be focused on.

Many companies use their ABC Analysis model to pinpoint the most valuable stocks. They then determine which replenishment strategies ensure they will only be out of stock if they have to tie up excessive resources.

Get involved with all stakeholders

To manage your inventory correctly, you must form a team of experts with different areas of knowledge.

The first step is establishing a team of experts in mathematical modeling. However, you need to develop a culture that ensures they can interact effectively with non-math executives. It is also important to include personnel from every stage of inventory management, including workers on the floor to the warehouse manager. It’s good to seek input from customer support staff as well.

It is also crucial to build a solid relation with your manufacturing staff as well as suppliers from outside. It will ensure better quality supplies and new opportunities to lower costs.

Make sure you align your approach with your business model.

There isn’t a universal solution to monitoring inventory and stock management. Every brand has its own needs, depending on its size, delivery method, and geographical location.

When selecting management software, the following factors should be considered:

Transportation networks Does it require international or local delivery? What about store pickup and fast commerce choices?

Warehouses location: Based on the volume of historical data and geographic requirements, what information must be available in which area?

Manufacturing places: Where are supplies situated concerning the warehouses?

Make sure you choose the right tools.

It’s crucial to select tools and software that will grow and evolve with the business you run.

The Cloud-based software for inventory control typically provides this feature. They’re not affected by power outages or local technical issues. Be sure to select one that is compatible with your other eCommerce platform and provides the data you need to make sound decisions regarding planning your inventory.

It is also advisable to adopt technologies like mobile printers, computers, and scanners. It can save time in the warehouse and the field, allowing employees to locate goods more quickly and without many errors. RFID tags also permit hands-free, instantaneous stock counts.

It is important to remember that your tools will be as effective as the process of management that you’ve set up.

Top Inventory Management Software

As mentioned above, warehouse technology will empower employees and delight customers. Let’s closely review the software, which allows companies to keep a complete eye on their inventory in only a few clicks.

Best software for managing inventory

End-to-end solutions for software such as Zoho Inventory and Orderhive, Brightpearl, TradeGecko, and Skubana can all be used to monitor inventory levels of orders and fulfillment.

Simply stated, they connect all the Supply Chain. It will let you know what stock is available in your warehouse and what is going out at any time.

It’s crucial to make sure the platform you choose works with other essential tools, like your accounting software, eCommerce store platform, and CRM software.

Software for controlling inventory

There is also software designed to focus solely on controlling inventory in your storage and warehouse facilities.

Such as Odoo Korber and Fishbowl aid in the implementation of efficient processes for stock. The aim is to make the most of the space in your warehouse and decrease expenses by reducing stock levels.

While at the same time, you’ll have enough stock available to minimize the danger of being short.

Warehouse-centric solutions enable easy implementation of RFID tags and barcodes that are smart to facilitate stock management.

Omnichannel stock monitoring software

If you sell products on third-party marketplaces or retailer networks, tools are designed to help you manage your stock across different platforms.

There are many software that offers stock monitoring and inventory insight at a greater depth level. Its comprehensive coverage reports contain live data on stock fluctuations and prices for each channel you sell through. It allows brands to boost sales by ensuring their products are always available and priced correctly.

Additionally, it is possible to monitor the ranking of a product on the search and the customer’s ratings on every channel. It helps brands comprehend their products’ popularity online and ensure they can be found on digital shelves.

Final Thought

An efficient inventory management system is not just an advantage for businesses in the eCommerce business world but a necessity to improve the performance of your business. Once we’ve reviewed the steps and tools required to begin, you’re on the road to managing your inventory and fulfillment and delivering positive outcomes for your company’s bottom line.