Inventory management is essential in any industry because it helps you organize your stock throughout the supply chain. This includes raw materials to finished products, sales and storage. It also monitors your stored goods and tracks their location, quantity, dimensions, and weight.
Inventory management can provide you with several benefits when done correctly. Once centralized, you can easily keep control of your inventory.
Here are some other benefits your business can enjoy when you have inventory management:
1. Boosts supply chain operations
It is normal to encounter unexpected challenges in the supply chain. However, preparing for it is one of the many ways to resolve such crises; you can do this with a manufacturing inventory management solution if you are in the manufacturing industry. Instead of getting lost when a supplier can’t deliver, you can establish a more effective supply chain diversification strategy.
One strategy is to have more suppliers. When you know the amount of your inventory, you can prepare better. You can order from others instead of relying on just one supplier, especially during peak season. This can mitigate the possible risks of having limited or non-existent remaining supplies.
2. Reduces hiring costs
You are always aware of your remaining inventory with properly functioning inventory management as your operations can run more efficiently. You no longer have to make your employees hesitate to find where the missing inventory is. You can use the report to track where each item is from shipment to your warehouse to delivery to customers.
With this, you won’t have to hire extra staff to check inventory and another team to process orders manually. Your employees can focus more on processing orders and meeting customer needs.
3. Increases sales
Some customers prefer to receive their items immediately. They are more likely to find merchants with inventory in stock than to wait for you to restock your items. Before they start patronizing other vendors, find ways to track your inventory.
Indeed, you do not want to miss potential sales because you are out of stock. With inventory management, you can prevent your supplies from running out. You can also restock your inventory in time for peak seasons, helping to boost your sales.
The inventory management report lets you know which products are in high demand. This will help you decide if you need to order more and when to reorder.
4. Optimizes execution
You can also increase your order fulfillment with a strong inventory management system. For example, you might have inventory in multiple fulfillment centers, called inventory distribution. You can apply it effectively when you know which ones are considered “hot items” in certain areas or locations.
You can speed up the delivery time because the products are closer to your customers. It also reduces shipping costs, a benefit for you and your buyers.
5. Connects Front- and Back-Office systems
Each department has its responsibilities, but all are involved in the inventory. They all need access and updates on inventory, from legal to finance and from market to sales.
Access to inventory information must be available through inventory management software. This includes cost of sales trends via graphical analysis, recently used inventory reports, and item information summary.
6. Promotes better organization
Another benefit of inventory management is its ability to develop an organized system for your inventory. You can easily categorize items based on valuable parameters such as name, shape, and size. This will help your team become more accurate and faster when fulfilling orders.
For example, a manufacturing company can easily classify each piece of machinery by lot number and name. As a result, employees can easily track the movement of each component. They can also find certain machines at a specific location. This way they can work on more pressing matters rather than spending more time figuring out where the machine is.
With an organized system, it is also easier to know who is reliable for a specific item. This can reduce liability by preventing employees from accidentally swapping orders with different customers.
7. Increases productivity and efficiency
You can use inventory management software to organize and monitor your inventory. By having such, you can increase the efficiency and productivity of every employee. They no longer have to perform manual tasks repeatedly, especially when using agile inventory processing features or barcode scanning. Your staff also won’t have to manually enter box numbers or product numbers individually into your system. They can finish recording inventory much faster with an automated system.
You can avoid potential lost sales when you know where your products are and how much inventory you keep. Thus, inventory management is essential for any business. With an automated inventory management system, you can do more while having an easier way to check and track your inventory.