As a business dealing with a lot of complex inventory, managing the associated processes can be just that – complex. And the impact of that complexity is compounded when you consider the cost it creates. Whether it’s missing stock at the end of the month, or a surplus of stock that hasn’t moved, it seems natural to assume that such costs – which often run into the thousands of dollars! – are simply part and parcel of operating in such an environment.
Unfortunately, few realise that letting the side effects of complex inventory impact their bottom line simply doesn’t have to be the case anymore.
Streamlining your inventory management process is vital – customers are more demanding, competitors are more aggressive, and you certainly don’t want to get left behind.
Once you do recognise that optimising the management of your inventory is a priority for your business, where do you go from there?
With the wide range of technology available, the challenge is no longer finding a solution to simplify your inventory management processes. Instead, the challenge really is working out which solution best meets the specific requirements of your business.
Here are three simple, but extremely effective steps for working that out:
- Identify each of the problems you’re trying to solve
Start with yourself. What specific problems have you faced that made improving your inventory management processes a priority for you? Then, talk to your staff to identify the specific concerns they have around the management of your complex inventory.
Once you have a clear list, drill down on each problem to identify how specifically that issue is impacting your business as a whole. Peel back the symptoms to identify the root cause and its impact.
For example, when they first came to us, many of our clients were unable to deliver stock on time and were unsure of the stock availability in their other stores and warehouses, leading to poor client satisfaction and double buying.
You may notice some key issues rise to the top of the heap that require immediate addressing… leading to the question, how?
- To solve each of these problems most fully, consider what specific requirements any solution you consider has to fulfill
Once you have a list of key problems, the next step is to identify what requirements you need to address those challenges.
For example, if you are constantly dealing with misplaced stock, a key requirement will be the ability to locate stock easily in the warehouse through a centralised system or through your scanning devices.
Having worked with businesses such as yours regularly over the last 33 years, here are some common requirements of businesses operating in complex inventory situations. Any solution you consider must:
- Integrate with your existing software;
- Provide comprehensive visibility of your current inventory levels;
- Provide a range of options through which to track and identify your inventory; and
- Be customisable to match your industry-specific requirements.
- Select the solution fulfills each of these requirements
Recognising these requirements and the benefits businesses stand to gain, we’ve developed Micronet Distribution System to meet the specific needs of businesses managing complex inventory.
As a result, Micronet Distribution system is one of the most flexible and powerful distribution systems available today. The inventory management module in Micronet handles the most complex inventory processes and allows you to easily manage inventory levels, purchasing and pricing, as well as stocktakes.
Specifically it enables:
- Inventory to be held in multiple warehouses at optimum levels to maximise customer service;
- ‘Transfer Locations’ to be created so that items transferred from one location to another are ‘held’ until receipted into the remote location;
- Each inventory item to be assigned alternate items, suppliers and supplier parts (which may be EDI specific), or identified by a range of specific customer part numbers;
- Any item to be found using its main number, the supplier’s number, its barcode number, category or its description;
- Inventory to be divided into strategic categories and classes to facilitate customer discount matrices, for ease of control and reporting;
- Special categories to be established for non-inventory, irregular stock items, manufactured items or temporary parts;
- The cost price of an item to be kept as full average, fixed cost, last in cost (stock is revalued at the last received cost) or first in first out (FIFO);
- Inventory serial number and batch lot tracking; and
- Tracking of safety stock levels, items overstocked or those that need to be replenished based on sales averages and lead times, through standard reports.
I hope these thoughts will help you when you work towards streamlining your inventory management. If you are dealing with any of the issues I’ve written about above and would like to discuss, please call us on 02 9542 2000.
Robert Butler is the General Manager of Micronet Systems, and is focused on helping business leaders overcome inefficient sales, complex inventory and customer relationship management practices by leveraging cutting edge technology.