Inventory Management as a Strategic Tool

It can be tedious and difficult to keep accurate track of your product inventory levels, but it’s necessary and important, and can be a key part of your financial management. Problems can arise if you have too much of an item on hand, or worse – run out entirely. However, with automated inventory management tools, you can not only avoid supply problems, you can use the information to make strategic decisions that benefit your company’s bottom line.

Generally, if you are effectively managing your inventory, it’s a direct driver to improving customer service and satisfaction. If you haven’t seen how automated inventory management tools can benefit your organization, here are a few benefits to consider.

True Cost

Knowing and managing the true cost and the gross profit of your inventory is critical to strategic decision making. With automated inventory management tools, you can instantly know your cost for each item in your inventory, ensuring you’re setting your pricing correctly. Costs seem to be going up or down? View trends to see if there are additional costs, such as shipping, that need to be captured and accounted for. Knowing your true cost gives you more control over profitability.

Inventory Visibility

Do you have real-time access to your inventory on hand? Do you know what’s been committed to existing orders, what’s still available to sell, and where everything is currently located? Many companies don’t have a good perpetual inventory visibility system – a system of record that tells you what you have on hand and where it’s located at any point in time. Know this information real-time and at the simple click of a button and you create a strategic advantage.

Inventory Levels

Maintaining appropriate inventory levels is key. You want to minimize excess stock, but maintain enough so you can ship on time and provide great customer service. But carrying inventory costs you money, so it becomes a balancing act. In order to create this balance, you need a system that can be easily set up for safety stocks and reorder points when inventory drops to a certain level. Reports derived from an automated inventory management system can detail your replenishment lead time as well.

Do you tend to sell more of an item in a particular season? You need a system that provides the historical detail to look for trends in buying and usage. You’ll have the ability to analyze usage trends and adjust your replenishment accordingly, notifying your purchasing agent or warehouse personnel as directed.

Effectively managing your inventory is a direct driver to improving customer service. Don’t settle for manually counting items, wondering what’s in stock, or guessing when the next shipment is coming. Control your inventory, control your costs and boost customer satisfaction through automation and integration.

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