Inventory Management in 2022 and Beyond: Get Ready for 2023

Are you concerned about the state of your supply chain? You can give yourself a nice security blanket if you improve your inventory management processes. It is true that supply chains are still under a significant amount of stress, and you have probably felt this yourself. After all, you have probably seen that your overhead expenses are rising. Therefore, you need to make sure you take a closer look at your inventory management best practices if you want to put your business in a position to be successful. What are a few of the most important tips you need to follow if you want to optimize your inventory system?

Take a Closer Look at Your Pick and Pack System

First, you need to take a closer look at your pick and pack system. You probably have a warehouse that is responsible for managing your inventory, and it is critical for you to optimize the processes that you use. Some of the most important practices you should follow include:

  • Try to place your items that sell the fastest near the packing station. If you know items are popular, they will have to be selected often, so make sure they are as close to your packing station as possible.
  • Have a dedicated team that is responsible for evaluating your warehouse and removing clutter. If you get rid of the clutter, it will be easier for your team members to find what they need.
  • Have a strong warehouse management system in place. That way, the items that are picked will be listed in the order the picker will find them.
  • Have a system that allows you to double-check each order for accuracy. You may want to establish barcodes that make it easier to count the items that are present.

These simple steps can go a long way toward helping you protect your inventory.

Know What Your KPIs Are

You need to keep track of your key performance indicators as well. These are the metrics that are most important to your success. Different companies have different key performance indicators, but many of the indicators you will use to track your inventory will be the same. For example, some of the most important key performance indicators you want to follow include:

  • The cost of carrying different types of inventory
  • How long it takes you to complete an order after it has been placed
  • How long it takes for certain types of inventory to be sold after you purchase them from your suppliers
  • The overall feel rate you have established per order

Depending on the type of inventory you have, you may have additional key performance indicators you want to track. Make sure you have a centralized system that makes it easier for you to track these indicators in real-time.

Have Extra Inventory in Reserve

Today, there are a lot of challenges facing our supply chains, and that is why you need to have extra inventory in reserve. Even though you probably have a good idea of how long it will take you to sell certain types of inventory, how long is it going to take you to restock your inventory after it has been sold? It is probably going to take you longer today than it did five years ago, and that is why you need to have extra inventory available. That way, you don’t have to refuse to fill orders just because you don’t have enough inventory available.

Increase Your Rate of Inventory Turnover

If you are serious about reducing your overhead expenses, you need to increase your rate of inventory turnover. What this means is that you need to figure out how you can sell your inventory more quickly. There are a few ways you can increase your rate of inventory turnover. First, make sure you forecast customer demand. That way, you know when demand is going to pick up for certain items. Then, consider liquidating your obsolete stock. If it has gone up so late, it may not be of any use to you. Finally, use a dynamic pricing model that allows you to optimize your profit margins and turnover rates.

Protect Your Company With Strong Inventory Management Systems

There are a lot of challenges facing companies today, and you need to remove risk from the equation. Even though it is difficult for you to remove all risk from your internal processes, there are ways for you to protect yourself if you improve the way in which you manage your inventory. Even though you might be comfortable with the way things have been, it is important for you to audit the internal system you use from time to time. That way, you can figure out what is working well, what is not, and what you need to do to improve your internal processes. Do not hesitate to reach out to an expert who can help you.