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June 26, 2024

5 Tips To Make Your Warehouse Inventory Management Easier

From an inventory management perspective, running out of stock is one of the worst positions to be in — especially if the stockout happens after purchases have already been made. To keep your business operating without shipping delay or interruption, you need to anticipate this situation before stock gets too low, and have a game plan to keep things in stock at optimal levels based on sales forecasts.

We've moved past the days of issuing backorders to customer purchases. Things have changed, and customers no longer want to wait on companies to manufacture more goods; they want their products within days — sometimes hours — after placing an order. Naturally, this demand to keep things in stock and ready to ship puts stress on your fulfillment process

Retailers like Amazon, Zappos, and the like have made speed the norm, offering 24-hour processing, prompt shipping, and 2-day delivery. And, for most products, there is a huge amount of competition. If inefficient warehouse inventory management practices are slowing down turnaround times, your customers are likely to seek out alternatives.

5 Tips To Make Your Warehouse Inventory Management Easier

In this fast-paced shipping environment, how can you manage your inventory to avoid any backorders? Follow these five tips to create an effective solution for your organization.

Know Your Items’ Demand or Speed

Items in an inventory naturally have a “velocity,” with some items selling quickly, and some more slowly. Once you know an item’s velocity, you can represent your stock levels in terms of how long that stock will last. 

For example, you might know that you have five weeks of smartphone covers in stock. If it takes four weeks to get a new order in, things are fine. If it takes eight weeks, you know that a backorder situation could be imminent with a sales surge, so you can respond accordingly.

Keep Trends and Seasons in Mind

Velocity is not constant, of course. The velocity of many items changes over time. For example, ornaments and gifts sell a lot faster during the Christmas holiday season. Barbecue grills and bathing suits sell better when summer approaches. 

Keep track of sales data over time, year after year, to find these seasonal patterns and learn from them. This also lets you track trends: if you sell fewer and fewer smartphone cases year after year, the demand is waning and you can probably get by with less stock moving forward.

Get Low Stock Reports in a Timely Fashion

You can have all the data in the world, but unless that data is collected and understood, it cannot be used. 

Make sure that you’re getting the right reports about item velocity. If these reports are not delivered in real time or with enough frequency, you won’t have the most accurate data and could experience a preventable stockout. Set up alerts that inform you when items are approaching a low stock situation so you can ensure restocking will occur on time or update your site for future buyers if a wait time is expected.

Trigger Reordering When Stock Levels Get Low

Waiting until stock is out or extremely low before you order new items or parts creates backorder situations. Thus, ordering needs to occur in anticipation of any items running out of stock for efficient warehouse inventory management. 

If your warehouse (or your 3PL partner’s warehouse) has the right technology, they can track inventory and trigger automatic reorders when items achieve low stock status. These "Dynamic Reorder points" — a feature of automated inventory management systems — can help organizations get the stock they need just in time to fill the demand.

Automate and Outsource

The more the above steps can be automated, the better. Automated inventory management systems cut down on human error and help ensure smooth operations.

While there is software that can help with this, many of the best-in-class solutions cost hundreds of thousands of dollars. And even if you can afford that expense, you will need trained staff and rigorous operating procedures to get everything to work.

For this reason, many small-to-midsize businesses outsource these functions to 3PLs with automated inventory management systems.

However, no two 3PLs are the same, and some don't have sufficient ability to monitor and report on stock levels. When looking for a 3PL partner, be sure to keep your organization's priorities front of mind. A good 3PL invests in the technology for:

  • Measuring stock levels and item velocity
  • Keeping track of inventory in real time
  • Generating reports and ending alerts
  • Automating and triggering reorders
  • Other capabilities for automated inventory management

All this investing and planning ahead on the part of the 3PL means you don’t have to worry about warehouse inventory management, enabling you to focus on your business and your brand.

Prepare With the Right Partner

The right partner will not only help you with warehouse inventory management, but will also provide you with the best possible tools to stay prepared for your whole operation. 

If you would like to hear more about this kind of technology and how modern 3PLs are using it, reach out to our team. We can show you how Materialogic leverages technology to give you information when you want it, and automation when you need it.

Tag(s): Inventory

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