When it comes to the way you manage your inventory, there are best practices that can help your business save time and money. Get a fresh perspective on inventory management by taking a step back and analyzing some areas you might not have noticed before.
Optimize Warehouse Organization
Are your parts and products ideally situated in the warehouse? Perhaps there are a number of combinations of products that are often sold together, so you could save workers’ time by situating those items next to each other on the shelves. That way, when a warehouse worker is picking items to fulfill a sales order he or she is more likely to only have to walk to one part of the warehouse instead of having to walk to different sections to collect all of the products in the sales order. It should be noted that this reorganization process isn’t necessarily and one-and-done deal. Consumer purchasing habits may change over time and seasonal factors may also affect the ideal placement of items in the warehouse. There is always room for improvement, but it is good to get a lot of the leg work done early on and then make minor tweaks later.
Make the Most of Vertical Space
A warehouse is more than a 2-dimensional space. You can use tall shelving and storage racks that reach high into your warehouse to make the most of its vertical space. These let you store pallets on multiple levels or tiers with this kind of setup. Forklifts and other heavy-duty equipment (along with the required training and licenses) will likely be necessary to make this possible. But the initial cost involved in making these changes may prove to be small compared to the benefits of better utilizing the resources and space available to you.
Consider Drop Shipping or Consignment
Do you have a plan of action to respond to product shortages? You know what they say: hope for the best, plan for the worst. Consider setting up a drop shipping account with another seller of a product you sell so that if you run out of that product, you can turn to them to make sure your customer doesn’t feel shortchanged. They will still get the product they ordered from you, and you will be able to maintain the relationship by using a drop shipper to deliver it without missing a beat. Some businesses exclusively rely on drop shipping as a way to save on storage costs and other logistical expenses. Others use consignment as a way to get their products into stores to test the waters and potentially break into new markets. With consignment, stores don’t actually purchase the goods they have on their shelves until they are sold to a customer. Like drop shipping, this has the potential to transfer carrying costs from the supplier to the retailer, so it may be a viable option if this is something that interests you.
Automate Business Processes
Most businesses start out using something simple to keep track of their inventory. That makes sense because there is no need to go with a system that is more complex than what it is being used for. Startups have smaller inventories than large businesses. They can get by with notes written on pieces of paper or Excel spreadsheets that detail vendor names, product names, quantities in stock, and other information. But when the time comes for them to add greater complexity by purchasing in higher volumes, working with multiple vendors, adding new locations, and selling to more customers, they will likely discover that their manual methods of inventory management are not able to handle the load. They may want to automate business processes by using inventory management software to set up automatic reorder points on products, use barcode scanners to perform cycle counts and picks, and forecast future stock requirements, among other things.
A Fresh Perspective
You don’t have to manage inventory the same way you always have when there’s a better way to do it. By taking a close look at your processes and seeing if there is room for improvement, you can gain a fresh perspective that will be a boon to your business.
Get even more advanced inventory and warehouse management tactics by registering for a free webinar hosted by Insightful Accountant on May 23, 2019. It will be presented by Brandon Phillips. THIS EVENT CAN BE FOUND IN OUR WEBINAR ARCHIVES
Brandon Phillips Fishbowl
Author Bio: Brandon Phillips has been working for Fishbowl for over 6 years, and for 5 of those years he was a trainer where he would fly out and help companies set up their new inventory management systems. He has been to hundreds of warehouses and has seen many different business processes in action. Brandon has a degree in business management.