The 4 Most Important Considerations in Inventory Control
Successful inventory control is necessary for any business with growth aspirations but it is particularly relevant to organizations trying to manage inventory in multiple warehouse locations. The singular purpose of inventory control is to find an appropriate stock balance that allows you to satisfy customer demand while simultaneously minimizing costs.
The consequences of poor inventory control methods are many: high storage costs due to excess inventory, dead stock and stock spoilage, wasted labor, lost sales due to unsatisfied customers, and unnecessary supply chain disruptions, just to name a few. So what can be done to protect your stock from damage, loss and theft? How can you make reporting easier for financial and decision-making purposes? What do you need to know to be able to forecast sales trends more accurately, mitigate risk, minimize loss, keep customers satisfied and streamline your warehouse processes?
When considering how to improve your inventory control, it can be instructive to ask yourself 4 questions.
1. Which Inventory Control Methods and Techniques Should You Be Using?
Every supply chain is different and the methods and techniques of inventory control will vary according to the size of the organization, whether you’re moving raw materials or finished products, number of warehouses and other relevant factors. Depending on your own supply chain, here are some of the top inventory control techniques for you to consider using:
- Economic Order Quantity (EOQ)
- ABC Analysis
- Demand Forecasting
- Batch Tracking
- Bulk Shipping
2. What Can You Be Doing to Optimize Your Inventory?
Look closely at how your products are being distributed and how you’re evaluating your inventory operations. Where are you wasting valuable time, labor and money? What areas of your inventory can you optimize?
Start with scheduling regular inventory audits and cycle counts to ensure accurate inventory levels. A comprehensive audit will also show you where automation would be useful in your operation. Cycle counts, meanwhile, can be spot checked periodically to compare what you have on hand to what you’re likely to need in a few weeks or a few months.
Track important inventory KPIs such as inventory turnover, velocity, days of supply and your inventory-to-sales ratio. Finally, maintaining a safety stock can be extremely helpful in case of unexpected shifts in customer demand, supply chain disruptions, or even forecasting errors.
3. How Will You Integrate Inventory Control with the Other Systems and Technologies You’re Using?
Your inventory control system should easily integrate with any and all other systems you may be using, from the warehouse management system (WMS), to advanced analytics and automation technologies.
You’ll likely want the system to support all types of barcoding, purchase order history tracking, shipping record maintenance, and the tracking of product expiration dates and contacts. Depending on how high-tech your operation is, you can shorten your production lead times and eliminate those laborious warehouse tasks by integrating automation technologies like RFID (a more expensive alternative to barcoding), voice picking, and/or conveyor lines throughout your warehouse(s).
By integrating your inventory management system with an analytics solution, you can create extremely precise forecasts based on historical and seasonal sales models, product life cycles and production levels. Another must-have nowadays is cloud technology. A cloud-based inventory management solution allows you to track inventory levels in real-time across multiple channels giving you and your teams a much more comprehensive view of your data.
4. Is Your Warehouse Layout Optimized for Your Inventory?
As eCommerce has grown in the last decade, many organizations are finding that laying out their warehouses for smaller, more frequent orders is a better idea than laying them out for larger, infrequent orders, as was the norm in the past. The right warehouse layout can improve worker safety, speed up shipping times and eliminate time-consuming warehouse tasks.
When deciding how to optimize your warehouse layout, figure out what your main objectives are. Are you trying to maximize storage space? Create more efficient routes for your pickers? Prevent traffic jams on warehouse aisles? Once you’ve figured this out, you can conduct a warehouse audit and hire a warehouse layout consultant to design and implement the new layout.
Consider DATASCOPE WMS for Your Inventory Control Needs
DATASCOPE WMS is an all-in-one warehouse management system, inventory control system, and analytics platform. With both inbound and outbound inventory control modules, our WMS supports demand forecasting, cycle counting, stock replenishment, purchasing and more. Our cloud-based system enables every member of your team to quickly access and share the inventory data in fully-customized reports based on relevant metrics you’re tracking.
If you would like to learn more about the inventory control methods within DATASCOPE WMS and how to implement them into your own supply chain, schedule a software demo!