Inventory Management Systems – What You Need To Know
What Is Inventory Management? Why Is It Important?
Inventory management is the process of controlling the flow of products. Its goal is to know exactly how many units have been sold recently, how many are still on your shelves, and how many you need to order, and to use that information to optimize your inventory system.
The first thing you must do is track every unit that enters and exits your storage facility. This foundational work yields insights into the next steps for buying future units so you can keep the correct number of each type of product ready for future sales.
Inventory management depends on a well-planned organizational system. This might include barcodes and scanners, precise shelf labels, a clean warehouse, and established processes for picking items off shelves.
In contrast, an inaccurate or imprecise system of inventory management can lead to problems like product shortages at crucial moments, backorders, or too much stock. This in turn can cause customers to demand refunds, damage your company reputation, and waste purchasing dollars and inventory space.
A company needs an efficient, smoothly-running inventory management system to hope to thrive in the long-term. That’s what Elite OPS provides: proven processes and technologies that will maximize your chances of success.
What Is an Inventory Management System?
In their early stages, some businesses operate with a small inventory and a relatively low number of orders. Their initial employees are tapped to pack boxes, send orders, and maintain a necessary amount of stock.
But as businesses grow, the number and frequency of orders often become too complex for their early methods to handle. They may need to upgrade to a clearly-defined professional system, which implements:
- Tags or barcodes on all products and/or materials
- Hardware technology, such as handheld barcode readers
- Software technology, such as a dedicated inventory-management suite, which stores data about every product in a warehouse, analyzes that data, predicts future needs, and more
- Written policies and processes that govern how employees and technology will label, document, and report on inventory
- Adoption of a proven methodology, such as Stock Review, Just in Time, First in First out (FIFO), ABC Analysis, or others
- Employees who are skilled at operating the system
Some companies build their own inventory management system, while others purchase many of the components from an outside expert. Still, others simply outsource the work to a professional inventory management provider.
Whatever adoption method you choose, your organization will benefit from avoiding shipping errors, lost inventory, lost time, and customer complaints. Also, you’ll retain employees who are satisfied working in a well-organized, efficient environment where they can learn new skills.
Benefits of Having an Inventory Management System
Many successful companies implement warehouse inventory management systems. The adverse effects of disorganized inventory can be disastrous, whereas the benefits of inventory management are numerous, including:
- Improved Profit Margin: By tracking every product, reducing lost inventory and returns, and forecasting demand, a company can reduce expenses and increase profit.
- Greater Efficiency: When all items are in their places, and consistent processes are used, employees can find them quickly. The less time spent locating items, the faster products get delivered.
- Higher Customer Satisfaction: Through better forecasting and an organized system, a company can avoid running out of products or losing sales. This improves your reputation and increases customer retention.
An inventory management system can help you achieve a balance between incoming stock and outgoing sold items, along with reducing your backorders list.
Choose Elite Ops for Your Inventory Management Services
With an outstanding inventory management system, a business can track every item on every shelf. Logistics become smooth and efficient. Stockouts become a rarity or non-existent. Forecasts are more accurate.
Elite OPS has more than 25 years of experience helping companies like yours master their inventory systems. We can give you peace of mind about your inventory and your future success and profit. Request a quote for any of our 3PL services, or contact us now to learn more about inventory management services.