Inventory Management is a crucial segment in E commerce business and it is a good practice to formulate strategies that will help to execute the same efficiently. When a company neglects inventory management it suffers because they are at a total loss to understand and keep track of customer needs and the supply chain system. Such inadequacies lead to the bottom line suffering and it is advisable to develop inventory management strategies which use and collect data from every aspect of the business to provide solutions across the board.
It is interesting to see what Robert Lockard an industry expert says about Inventory Management; “After a careful examination of your inventory needs, you set two lines-one at the top and one at the bottom of how much of each product you must keep on hand. When you reach the bottom line, you order enough of that product so you won’t go above the top line. As long as you’re somewhere in the middle, you’re okay.” That is the simplest way of putting it across.
- Out of the many methods that are in practice the Just in Time Management system fulfills only current needs with some expected orders kept in stock. This optimizes storage space cost effectively. Taking a cue from Trade Gecko we feel that this is a good practice because dead stocks do not accumulate, however buying habits, seasonal demand and sourcing must be strictly researched into and followed accurately in order to succeed.
- Inventory Management strategies need to vary from company to company depending upon your needs and your investment capability or capacity to take a beating God forbid. There is unfortunately no single magic formula and you need to find your comfort zone where service levels can go up but the cost is reduced or maintained. As Laran Joseph says, “A mismanaged inventory can lead to an unnecessary increase in the working capital. The excess funds could have been fruitfully directed to fuel the company’s growth initiatives or research and development efforts.”
- To guard against unexpected surges in demand a seller needs to be prepared even though he must watch out for problems due to under stocking or over stocking. The idea is to maintain a balance in everything. However you must keep a track of both inventory and sales data for this.
- Automation is the ultimate key to many a problem of Inventory Management. So amongst your strategies automated Inventory Management strategy must be a priority. It is effective, efficient, time saving, precise and productive besides reducing errors. Simplify the entire system with reputed software because the answer to this lies in choosing the right tool. Data analytics is also a compulsory tool amongst the top inventory management strategies to adopt by an E commerce vendor. This elucidates information regarding products and sales forecast extremely fast. Thus the inventory can be scaled up and down as per market demand.
- However there are some key elements that need to be part of your strategy. Eunimart endorses a web based solution which can prove to be of integral value to your company because it is not only budgeting friendly but also easy to integrate into your entire business strategy. Besides this other solutions that can be of primal value to you are Mobile Inventory so that you can get alerts on the go. A few more important takes are use of bar coding which will ease the entire process, data importing facility to save time, your system should also offer the process of bulk transactions in order to get bigger jobs done easily. The primary goal here is thus to have all jobs done with ease and automated Inventory Management strategy is one of those jobs. The system should also be able to perform with easy cycle counts of supplies and stay informed in order to stay ahead with automation.
- By using the appropriate solution you can also break down the requirement for inventory to ensure smooth operations for your business with planning periods.
- Remember that “Inventory Management is a continuous, concentrated effort and a process that shouldn’t be handled solely at the operations level. A successful inventory plan should also involve your marketing, catalog, E Commerce and Merchandising departments.” This ensures that all departments work in sync for the success of the company.
- Another strategy that can be used is for the wholesaler to hold the goods till the retailer sells them which means the retailer does not pay but the goods are held for him till the actual sale thus saving your investment on dead stocks which are a problem if Inventory Management is not done correctly.
- Aim at accurate forecast so that you can make informed decisions and predictions after customers have placed orders. Identify and monitor needs and review orders and stocks carefully and closely. For this good software can help you as also having the right people for the right job. Make employees feel they own the inventory and choose people with an analytical bent of mind.
- Finally the strategy to track goods is very important and to effectively do this, use batch numbers. Lot tracking is another top Inventory management strategy because it can help to track where the goods come from, where they go, their expiry dates and even quantity shipped. You can thus optimize your business by leveraging this data by managing your inventory efficiently.
Successful Inventory management strategies mean that the seller must be aware of how the business process works and then use the software that best suits. From balancing costs to tracking inventory, customer needs and employee performances, in this everything matters because together they result in driving revenue and improving margins. Eunimart advises you to track the trends of high margin versus low margin products which will denote the sales pattern. Coupled with knowledge about your inventory you can identify “overlapping product lines” that are of no use to you. This helps you to plan better and execute your business with success. The idea is to measure everything well, be it sales, inventory, or incomings in order to drive change. Finally at Eunimart we urge you to use our solutions to take a giant leap forward in your business. Be sure to audit your inventory and keep track of stock on a regular basis despite the use of technologically advanced solutions and remain ahead of others with our solutions to improve upon inventory management strategies and techniques.