As a business’s operations increase, it is required to continually process and keep track of a growing number of orders. This can be quite challenging, and if not handled properly, it can cause the business financial and even legal issues.
However, along with having the right inventory management system, you also need a solid strategy to go along with it.
So, your strategy should often incorporate the utilization of software because it addresses many key elements of a good management strategy such as automation and minimal error.
Above all, it is not only about the software. It also includes best practices for supply chain management, responsive customer service and so on.
Therefore, in today’s highly competitive global economy, a modern inventory management software and strategy is critical to the success of any retail or eCommerce business.
Below are four key elements of a solid inventory management strategy.
Greater Supply Chain Visibility
Generally, greater supply chain visibility is the result of a good inventory management strategy and significantly facilitated by software.
A business needs to coordinate with suppliers on the necessary quantity of goods to be delivered at specific times. In addition, business owners need to carefully choose suppliers based on order fulfillment times, product quality and other criteria.
Inventory management software helps you make more informed decisions that will save your business money through greater supply chain visibility.
It enables you to properly assess the best suppliers to order from, based on shipping speed, market demand and other factors.
Accurate Financial Records
Accurate financial records and subsequently more accurate financial statements are key to a solid inventory management strategy.
Therefore, it is especially important if your business spans multiple channels, has a large supply chain and a diverse customer base. The more comprehensive and accurate your financial statements are, the more impact your planning, forecasting and decision making will have.
This is another area where inventory and order management software plays a key role in uniting every channel and your accounting platform.
Inventory Optimization
Any good inventory management strategy has inventory optimisation at its core.
This has to do with determining the exact amount of inventory your business needs and ensuring the systems are in place to maintain it.
Why is this important? If the inventory is low, it can result in shortages. In its turn, it can lead to loss of customers and drain in the business’s profits.
Also, if certain products are overstocked, it can raise expenses such as warehouse rent, heating, lighting, security etc. Both will have a negative effect on the business’s bottom line.
Improved Efficiency and Productivity
Greater productivity is the goal of any business, and there’s no question that inventory management software like DEAR immediately facilitates this.
Implementing inventory software and training staff to use it ensures they will utilize their time more wisely. In its turn, it would eliminate most manual processes.
What is more, software also enhances the efficiency by making it easier to detect incidents such as theft, warehouse accidents etc. This can be accomplished through the real-time viewing of inventory data.
The fewer mistakes your business has through software, the more it will fall in line with inventory management best practices.
