Business inventory management is a serious challenge for many companies. Although a tight inventory control and a sales forecast are two strategies that help with inventory management, companies are still facing many inventory challenges. Taking the time to look at and understand these challenges can be a turning point in solving them. Here they are.
- Breaking down the inventory into safety stock, replenishment stock, and normal stock in order to maintain adequate levels for each of them.
- Using statistical formulas that integrate sales forecast data to accurately calculate safety stock levels.
- Recalculating safety stock levels at least every six months to improve the effectiveness of your inventory control.
- Deciding who takes key inventory control decisions in order to maintain cost-effective inventory levels as well as to ensure a fast and reliable customer service.
- Assembling a team that decides when new products have to be ordered or manufactured to keep up with the effects of major marketing campaigns.
- Determining how often to order new inventory items when this isn’t set by the supplier or the factory from which the products are obtained, while taking into account changeover and inventory costs.
- Deciding whether inventory ordering should be done regularly using data from analytical tools, in order to continuously improve the inventory control
- Establishing a process for determining why excess stock arises and figuring out how to deal with it in a cost-effective way.
- Assigning the tasks of identifying the root causes of obsolete stock to different teams within your organization, which work concurrently, linking their efforts.
- Performing effective inventory control on all parts of your inventory, not only the finished goods.
In the end, it should be remembered that inventory control and management are on-going challenges that businesses have to address all the time. They cannot be solved once and for all, but require persistent work and innovative approaches, else they can become serious problems that have a major impact on the profitability of a business.
