In a healthy business, everything that goes in and goes out has to be kept in careful balance in order for things to continue running smoothly.
Known as inventory management, it’s measured by how good you are at reducing inventory investment while continuing to meet your customer service goals.
When inventory management is perfectly balanced, it plays a vital role in the continued success of your business.
However, when there is an imbalance, the symptoms are obvious:
- Inefficiencies across your business undermine profits and growth potential.
- Your business loses agility and responsiveness, as you become more complex and you spend more time on non-productive tasks.
- Getting real-time insight into operations causes major headaches because organizational growth has resulted in your business relying on loosely integrated management tools.
It’s not surprising so many businesses find it difficult to strike a healthy balance when you consider the conflicting objectives across different parts of the business.
The sales department prioritizes the delivery of products in the best time frame to satisfy customer demand, so it encourages the business to keep stocks high.
However, the purchasing department gets volume discounts on large batch and off-season purchases, which increases inventory.
Meanwhile, your production team wants all parts and raw materials to be constantly available to keep line efficiency high and run large batch sizes.
Your finance department on the other hand wants to keep inventory low to minimize stock holding costs.
Get the detail you need
Today’s modern business management solutions provide high-level analytics, detailed reporting, and granular workflows to coordinate demand, inventory, and supply.
They can also provide information on stock-outs and overages and when these are likely to occur.
That means you can identify seasonal shifts in demand item by item, as well as patterns for large customer orders that might put additional pressure on your business.
You can also work out where your business might be losing money by identifying excess orders, items that are moving slowly enough to warrant draw downs, and unsalable items in need of disposal.
You can even see patterns in price reductions and volume discounts from suppliers, as well as sub-optimal and optimal performance by suppliers.
Act on better business insight
Because business management solutions can analyze big data from across the business, you can forecast demand more accurately and much faster than previously possible.
You can see recommended optimal inventory levels for sales availability and restocking schedule, anticipate customer needs and demand cycle, and supply inventory specialists with advance warnings if stock levels become too high or too low.
Business management solutions can also provide unit-level thresholds for automated ordering and replenishment, removing time consuming manual processes.
And because you can adjust and scale purchasing quickly, you can allow for changes in demand and avoid shortages or excess inventory.
Be efficient at every level
Business management solutions allow you to communicate recommended stock levels, replenishment schedules, automated orders, and exception alerts across the business and to stakeholders outside the organization.
And because you can integrate CRM and support for e-commerce, you can ensure that teams from marketing, sales, finance, and legal have access to the latest customer data.
You can also manage the complex logistics of Just-in-Time (JIT) practices and connect distributors and manufacturers automatically with powerful APIs, so even if you’re not as big as the competition, you can still compete in the marketplace.
Inventory management can be a complex challenge.
However, proven business management solutions can help you to relieve the pressure, help you to project customer demand more accurately, and calculate the optimal inventory levels needed.
New, simpler, more flexible, refined business management solutions provide dynamic optimization inventories that maximise customer service, decrease inventory investment and lower costs, and significantly improve your business’s overall competitiveness and profitability.
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