If you deal with tangible goods in your business, then inventory management is one of the most important parts of your business. One of the best ways to increase your profits is to improve this area. For Cold Chain, making sure temperature sensitive items are shipped properly ensures fuller utilization of available inventory. Even if you think you have a good process, there are always ways to improve. Here are three ways to improve inventory management.
THREE ways to improve inventory management
1. Streamline your supply chain. First, it’s important to understand and streamline your supply chain. Before you can start filling orders, you must have the products in your inventory. Supply chain has many steps, including obtaining the raw materials to produce a product and eventually shipping it to the customer. If something goes wrong in your supply chain, it can mean chaos.
2. Have minimum stock levels. There is a delicate balance between having too much stock and not enough stock, and there is no perfect solution for this problem. One way to handle this is by setting minimum stock levels for items. Setting a minimum stock level is a combination of evaluating how often a product gets sold with how long it takes to produce more. If it takes a week to produce a particular item and your company sells one a day, your minimum stock level may be seven or eight on hand before ordering more.
3. Get rid of underperforming inventory. Finally, it’s important to get rid of underperforming stock. When you have underperforming inventory on the shelf, it can cost you money in many ways. Not only does underperforming inventory take up space in your warehouse, but it also doesn’t increase in value, and it doesn’t make you money. Take a look at your monthly sales, and don’t hesitate to evict products that don’t move.
For commerce businesses, inventory management is a reality, and bad inventory management can be detrimental. Streamlining inventory is key to having a thriving business. You can improve your inventory management by assessing your supply chain, having minimum stock levels, and getting rid of underperforming products.