There are a lot of theories and techniques surrounding inventory management. Many of them are quite helpful and very good at improving inventory management. But, we encourage you not to overlook the importance of adding an increasingly little-used tactic into your inventory management: common sense.
Most warehouse teams don’t have the time to figure mathematical formulas calculating goods in and out. They’re too busy working, keeping orders flowing smoothly from the moment the request lands in their system until it heads out to the customer on a truck. So make it easy for them.
Some of the best inventory management comes from that simple idea of common sense, and you’ll find that software—such as enterprise resource planning (ERP) software—that uses common sense logic, gives you the foundation you need to build a solid inventory management plan. Combining the power of ERP systems and inventory management could make you unstoppable.
Inventory Management by Common Sense
- Accurate Forecasting Requires Accurate Data. Take the guesswork out of forecasting inventory needs by adding an ERP system to your software plan. Mobile, cloud-based ERP systems can track real-time data and update systems accordingly for better forecasts.
- Make Only What You Can Sell. Gone are the product-centered days of pumping out widgets and hoping for the best. Today’s emphasis is on manufacturing and storing only what you can sell this month or quarter. By tightening up the reins on your manufacturing process, you can save on inventory management and warehouse costs by not tying up your capital in goods that you then have to track.
- Can’t Sell It? Don’t Make It. If something is consistently underselling according to the data in your system, it may be time to reassess whether it still belongs in your product line. Although you may like that particular product, if it’s not selling, you’re just wasting time and money. You must make business decisions based upon data.
- Figure Out How to Sell What You Must Continue to Make. If you have a pile of raw materials that’s already paid for and cannot be repurposed, it may be difficult to stop manufacturing a particular product. The same goes for machinery that’s been set to produce a certain amount of product. It may be difficult to transition into new materials and goods. If sales are still too low, plan an aggressive sales campaign to reduce inventory. Use forecasting tools and bring sales and marketing into the process early on so that they have enough lead time to help.
- Unsold inventory Never Improves with Age. Unlike a fine wine, unsold inventory never improves with age. If it’s sitting around in the warehouse, it’s not doing you or your customers any good. More aggressive sales tactics may be needed to move certain products out to make room for new ones. Don’t ignore unsold inventory; instead, make a plan to reduce it.
Inventory management is both an art and a science. With the right data at your fingertips to provide an accurate insight into stock levels and inventory counts, you’ll be able to use these common-sense tips for better inventory management.
Implement Best Inventory Management Practices with PositiveVision
For the best inventory management, you’ll need the perfect blend of common sense and an ERP system that is specifically attuned to your business needs. From Sage to SYSPRO, PositiveVision has the business software and technology you need. Contact us today to learn more.