Launching a successful product is hard. But what is even more difficult is keeping up the momentum that you built with so much effort. If you have backed up your product development with current market data, it is unlikely that you won’t get a single customer.
The real problem is when your audience demands surges, and your inventory goes almost nil. If you do not have a product to serve your audience, there is no real value in marketing it too.
This makes stacking the deck so critical. Ryan Daniel Moran gives a complete guide on how to do it properly. An inventory control system ensures that your product success never dampens because of the unavailability of a product.
In this post, you will get an in-depth understanding of what an inventory control system is and how an efficient inventory control system design can boost your product’s overall performance in the market.
Inventory Control System: Your Gateway to Product Success
An inventory control system is perhaps the most critical part of the complete inventory management of your business. It ensures that your business runs at optimal levels of efficiency at all times. It aims at creating the perfect balance between demand and supply. This means it’s designed for flexibility and scalability. To understand the ‘why,’ having a clear idea of the ‘what’ is critical. Let’s find out.
1. What is an inventory control system?
An inventory control system is laser-focused on the operations and warehouse management of the overall inventory management. From scanning new items to preparing units for assembly, an inventory control system is in charge of all. It optimizes your inventory space to ensure that your business has the optimal levels of inventory stacked up to fulfill your customer orders on time. In achieving so, businesses often embrace the power of technology. Installing inventory control software boosts the efficiency and productivity of the process exponentially.
The software uses your past customer sales data to generate insights on your business’s top-selling products and prioritize stacking them upfront over other items. This adds leverage to businesses keeping their customer’s satisfaction on point. Also, it makes effective use of your monetary resources, ensuring you don’t end up wasting money on items that aren’t in demand in real-time.
So now, when you have a clear understanding of the underlying principle of an inventory control system, let’s find out what are the immediate areas where it can benefit your business.
2. Why should you invest in an inventory control system?
An effective inventory control system adds significant value right from the deployment. From cost reduction to freeing up capital, improving warehousing, and customer satisfaction, it boosts all. Here are the following ways it achieves this.
a).Higher accuracy: Precision is one of the most significant benefits that an efficient inventory control system supports. More than often, the best practices involve digital management. Your inventory control software scans the barcodes of all inventories, new and retrieval units and reports the stock levels in real-time.
b). More confident decisions: Decision-making is a crucial driver of successful inventory management. An inventory control system makes this decision-making task powerful and more confident. Here’s how?
It measures your inventory turnover. Determining how fast your inventory is sold and restocked in a specific period estimates your average sales cycle to generate the next reorder of stocks. This ensures that sales volatility doesn’t affect your inventory stocks. Again, you do not suffer dead inventory because of overstocking.
An efficient inventory control system collects complete stock data to create a robust connection between upstream inventory activities like purchasing, manufacturing to downstream inventory activities like sales and product demand. This prevents bottlenecks, thereby speeding up processes and identifying momentum damping elements like least popular products and supplier strengths.
A typical inventory report would include stock information like product popularity, product availability, re-ordering requirements, highest sale-inducing products, product levels, product overstocking, or overprice analysis.
c). Prevents write-offs: Inventory control affects inventory accounting immensely. It tracks and measures every small value change in your physical inventory and costs of items sold over a period. Efficient inventory control successfully prevents write-offs for inventory, no longer possessing value. It achieves so by waste reduction, easier inventory value calculation, and helping bottom-line operations prioritize inventory needed in real-time.
d).Budget: Keeping your business’s cash flowing is critical for smooth running and scaling up. But, your inventory can take up considerable monetary resources, thereby creating a strain on your overall budget. An inventory control system can successfully eliminate this problem. An efficient inventory control system software tracks the current stock levels mapping the future of inventory order flow prioritizing products that are on the ‘hot list’. This means with precise forecasts you neither have to compromise on your sales momentum nor on the flexibility of monetary resources.
e). Organization: Having installed a stock control system has a dramatic effect on your organization of inventory. With a barcode scanner, you can take manual stock counting off your charts. With increased precision and quality, you no longer need to suffer heavy paperwork or human errors. Both your valuable resources, time, and money will be saved.
So, now when you know how beneficial an inventory control system can be for you, let’s find out the best practices that can keep your system on point.
3. Inventory control methods to optimize your logistics
Your inventory control system refines your complete logistics process: both inbound and outbound. Having comprehensive knowledge about the sales frequency and inventory order cycles can improve your business growth dramatically. But to make the most out of your inventory control system, there are certain best practices that you should incorporate today.
a). Integrate real-time tracking: Tracking inventory in real-time can create more transparency and efficient management of logistics in the long term. Having a detailed knowledge of stock levels and storage locations of individual products lets you make confident decisions on creating shipment forecasts, estimated delivery times for an item to reach your customer, effective communication of delays, and generate alerts for out-of-stock items.
b). Automate inventory reorders: Creating reorder points in your inventory system can trigger reorder events automatically at which your stocks need to be refilled. This event automation has an immense role while keeping the momentum up. Bt a word of caution here. You need to perform this activity for every SKU because of the varied demands of every product. What follows is more room for productive work and efficiency in timely orders.
c). Make heavy use of quality control: Order quality control monitors all critical areas of inventory control- tracking suppliers, monitoring inventory batch, improving future sales order decisions, customer satisfaction, and obliging regulatory requirements. The inventory control system makes quality control look easy. Knowing the location and number of units in inventory makes reacting to an event of a product recall simpler. To be super sure, you can use cross-reference.
d). Designate stocked and non-stocked items: Whether you run a seasonal business or a high-growth brand, inventory optimization is important as your inventory needs will change throughout the year. For example, an apparel company will likely not stock winter coats in early summer since it wouldn’t be cost-effective.
However, some clothing items will need to be stocked year-round like jeans or t-shirts. Non-stocked items, or those that will be sold on an inconsistent basis, will require a different process of inventory control. Not all SKUs are the same and won’t need to be ordered in the same quantities or replenished as quickly as others. You may even find you should discontinue certain SKUs that are costing you a lot of money throughout the supply chain but bringing in very little revenue.
e). Deploy zoning for higher productivity: Having in-house order fulfillment operations means your success is heavily dependent upon the infrastructure you create for your warehouse. This means scaling smoothly in a landscape that integrates high SKU (stock keeping unit) count and diverse product catalog, zoning is critical. This will help in easier organization and location of products when required to ship. Some of the filtration elements that you can use are expiration date, product category, lot number.
f). Perform regular audits: Regular inventory audits are a great way to spot potential threats, issues, and improvement opportunities. An inventory control system makes this dirt simple for you. What follows is an organized space and water-tight inventory ledger that can help you automate orders for optimum stock levels in no time. This means you have maximum control over your logistics now.
Inventory control is a complex task. Too much inventory can put you at risk of being monetarily deficit. Chances are you might not have enough to invest in other critical areas of your business like marketing, training, and product development. On the other hand, investing too little on stocking inventory can break your sales momentum, cause delays, and dampen customer satisfaction.
This means if your inventory control system has to champion its goal, it needs to align its mechanism with volatile demands, promotions, and resources. Thus, it is good to keep a check on how you plan your inventory operations from time to time to maintain recurring success.