Inventory management helps businesses be successful and with more demanding customers and rising costs, it is more important now than ever before that companies harness technology as a key part of managing their operations, including inventory.
In order to boost profits and support growth, it’s crucial to understand exactly how your inventories fluctuate and how consumer demand changes as the year goes on such as :-
- Forecasting future demand
- Determining when to reorder products
- When to scale back on products
- Where breakdowns in your processes are happening
One of the biggest challenges, if you are running an online business, is the need to effectively manage your inventory. As your business grows, this challenge only amplifies. Realistically, in order to sell on more channels and ultimately grow your business, the use of an inventory management system and a WMS solution becomes a fundamental necessity.
If you’re not already data obsessed, then you need to be. You’ll often need to be able to access and act upon inventory data within a day, or even a few hours, in order to capitalise on every opportunity that you’re presented with.
If you ask a retailer what the most challenging part of managing their business is—9 times out of 10 they will probably say inventory management. This is because inventory management encompasses many things that affect many different parts of the retailer’s business–from warehouse management and on-shelf availability to loss prevention and inventory counts. It only gets more complicated as a retailer adds more product SKUs to keep track of, or the retailer adds locations.
Managing inventory must be at the top of every retailer’s list of management priorities because it directly affects the retailer’s bottom line. Inventory shortages result in lost sales and lower customer loyalty, while too much inventory results in a higher increase in ‘Cost to Serve’. This is why every retailer needs an ‘Inventory Plan’.
A key element to the ‘Inventory Plan’ is having a point of sale system that takes into account all the aspects of inventory management—meaning not just what is on store shelves but also provides warehouse management capabilities so retailers can manage the stock behind the scenes. Also it is important for retailers with multiple locations to be able to track inventory in real-time across all store locations. The best way to do this is by using a cloud WMS solution.
With smart inventory management and a cloud WMS, your business will enjoy many benefits such as:-
- Inventory Balance – Good inventory management helps you figure out exactly how much inventory you need. This makes it easier to prevent product shortages and keep just enough inventory on hand without having too much.
- Inventory Turnover – You need to keep a high inventory turnover ratio to ensure your products aren’t spoiling, becoming obsolete or sucking up your working capital. Calculate how many times your inventory sells in a year and see where you can make better use of your resources.
- Repeat Customers – Good inventory management leads to what every business owner wants – repeat customers. You want your hard-earned customers to keep coming back to your business to meet their needs. One way to do this is to make sure you have what they’re looking for every time they come.
- Accurate Planning. – Using smart inventory management, you can stay ahead of the demand curve, keep the right amount of products on hand and plan ahead for seasonal changes. This goes back to keeping your customers happy all year long.
- Warehouse Organisation – If you know which products are your top sellers and what combinations of products your customers often order together, you can optimise your warehouse setup by putting those products close together and in easily accessible places. This speeds up the picking, packing and shipping processes.
- Employee Efficiency – You can empower your employees to help you manage inventory. Training employees to use barcode scanners, inventory management software and other tools helps them make better use of their time, and it helps your business make better use of its resources, both human and technological.
- Inventory Orders – If you’ve done a good job keeping track of how much inventory you have on hand, you can make smarter decisions about when and what to order. Inventory management software lets you speed up the ordering process. You can simply scan a product barcode and type in some information to place an order and generate an invoice.
- Inventory Tracking – If you have multiple locations, then inventory management becomes even more important because you need to coordinate your supplies at each location depending on differences in demand and other factors.
- Time Saving – Inventory management is a great time-saving tool. By keeping track of all the products you have on hand and on order, you can save yourself the hassle of doing inventory recounts to make sure your records are accurate. This once again requires inventory management software.
- Cost Cutting – When your inventory is humming along efficiently through your facilities, you can bet you’ll save a lot of money. Inventory management helps you avoid wasting money on slow-moving products so you can put it to better use in other areas of your business.
The importance of inventory management cannot be stressed enough for e-commerce and online retail brands. Accurate inventory tracking allows brands to fulfill orders on time and accurately. And as brands grow out of small warehouse space and into larger facilities, so does the need to efficiently manage inventory.
Taking your inventory management software to the next level is possible with our Cloud Warehouse Management System (WMS), will allow you to step up to multi-location management per product. You will be able to segregate your warehouse into bulk and pick slots. The system will determine what you should replenish and which warehouse bay you should replenish from based on rules defined in the software, to ensure that stock is properly rotated and managed effectively, efficiently and with minimal manual intervention.
Speak to one of our team to understand how Clarus’ WMS system can cost effectively support best practice warehouse management processes, better customer service and highly efficient working for a range of warehouse operations with pay per month options and no IT infrastructure needed.
Our platform can scale from a one user, small depot system to a 100’s of user distribution centre operation. The ClarusWMS platform will cost effectively scale with your business based on demand.
ClarusWMS is a UK based supplier of warehouse management solutions with a wealth of industry experience in third party logistics, wholesale / retail distribution, online fulfillment and manufacturing warehousing.