Inventory Management Strategies - Kinspeed

There’s no getting away from physical stock counts. Consuming resources from across a business and putting a halt to despatch activities, stock taking can be a highly disruptive process. There are ways however, to reduce the burden of the dreaded stock take. Businesses are developing inventory management strategies to reap the benefits of consistent inventory accuracy.

Depending on the size and complexity of inventory, manual stock takes can be a labour-intensive process. Developing an inventory management strategy doesn’t just reduce the burden of stock take, a better understanding of inventory has wide-reaching benefits for a business:

  • Reliable planning
  • Demand-based inventory
  • Reduced inventory (risk and costs)
  • Fewer stock write-offs

With numerous stakeholders relying on accurate figures to reconcile, budget, audit, and purchase, developing a structured approach to inventory management enables high accuracy year-round. In this guide to inventory management strategies, we share 6 tips for tackling physical stock counts.

1. Warehouse Scanner

The warehouse operative’s best friend. Stock taking using an integrated warehouse scanner ensures discrepancies are immediately addressed. Human error, such as double scanning, is prevented from skewing figures. Integration with the central business management system ensures all stock figures and batch data is recorded accurately, in real-time.

The benefits of using integrated scanners can go further still. An essential part of order fulfilment for distributors of perishable goods in particular, scanners are used to pick a specific batch and LOT numbers allocated to an order. The customer gets the right product and inventory figures remain accurate.

Read more about integrated scanners.

2. A Stitch in Time

Cycle counting is a popular method to maintain highly accurate stock figures without disrupting operations. Cycle counting methods are now widely adopted by businesses using digital technologies as part of their inventory management strategies. This is achieved using barcode or RFID stock labels scanned using integrated warehouse scanners.

Rather than conducting an all-encompassing stock take once or twice year, cycle counting counts small sections of inventory at a time. This method, conducted as frequent as weekly or even daily, avoids disruption to operations and maintains consistently accurate records. While this may sound like a fast method to increase the burden of inventory management, cycle counting actually reduces downtime overall.

3. Periodic or Perpetual?

Diving deeper into cycle counting, there are two established approaches: periodic or perpetual. The choice usually depends on accounting practices and inventory size. Distributors, heavy with stock, tend to adopt a perpetual cycle counting approach where inventory is continuously tracked and updated automatically. This is not only good for passing audits without issue, but it also facilitates highly efficient and accurate order picking.

Businesses carrying less stock but with high wastage rates also benefit from perpetual cycle counting. Fashion and apparel might seem a bit of a stretch, especially compared to the food and drink industry, but seasonality is a cause of high wastage in this sector. If not monitored closely, retailers and distributors alike, are at risk of having to write off last years’ trends.

4. A Date for the Diary

Automatic inventory counts are made possible with a dedicated, industry-specific software solution. Here, stock counting parameters and reminders can be configured. Albeit a rather prescriptive approach, automated counts are becoming an essential part of wholesale distribution and ecommerce inventory management.

The most robust inventory management strategies are highly structured. Perpetual cycle counting relies on a regimented approach to maintaining accurate inventory data. Inventory management software allows a warehouse manager, for instance, to assign tasks to members of staff and set reminders to ensure counts are performed on time.

5. Integration is Essential

The importance of inventory management cannot be overstated. Here, we return to the subject of integration because it is one of the most common barriers to implementing a robust inventory management strategy. It is often the case, when a business requires additional functionality such as warehouse scanners, new applications are added. The danger here is a lack of integration.

A warehouse scanner by itself is not going to help anyone. However, integrate it with the core business management system and suddenly the entire business is on the same page, at every moment of the day. Inventory data is available to finance and purchasing in real-time, as a stock count is performed. No one must rekey data – a source of errors on itself.

6. The Right Tool for the Job

If your business has robust ERP software in place, such as Sage 200, specific wholesale distribution tools can be seamlessly integrated. FastDespatch inventory management software is proven to deliver high levels of accuracy throughout the order fulfilment process. Integration of warehouse scanners and third-party logistics, deliver an up-to-the-minute picture of fulfilment. Connected to finance, sales, supply chain and marketing, leaders have full access to a complete, holistic picture of business operations.

If your business is not far along its digitalisation journey, you’re in a great place to get it right first time, with the right tool for the job. Wholesale Distribution Software is a dedicated solution for both small and large enterprises. Expertly integrated and tailored to the individual business and its users, this solution is adaptable and scalable. Integration removes complexity, one of the main barriers to sustainable growth.

While there is no prospect of ditching physical stock counts altogether, there are robust methods to ease the pain. Replacing spreadsheets with integrated inventory management tools can reap significant benefits for business: traceability, zero margin for error, and reduced profit erosion.

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