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Inventory management

Importance of Inventory Management for Manufacturing Companies: A Quantzig Success Story on Streamlining Ordering Inventory

 Importance of Inventory Management

Inventory management techniques can help you manage your business’s inventory and stock items; thus, helping you track where your assets are and what they’re worth. Inventory management techniques also analyze your business’s inventory demands and can even automate your ordering process. The real importance of management techniques has been realized by companies functioning in industries such as retail, food and drink, production, healthcare and many more. Implementing effective techniques can help advance your management process, providing transparency and efficiency to a complicated and complex system. Effective inventory management techniques can prevent:

  • Deadstock
  • Spoilage
  • Storage costs

Inventory Management Techniques

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demand forecasting

Is an Effective Retail Inventory Management the New ‘Holy Grail’ for Small Businesses?

What is inventory management?

Simply put, inventory management refers to the effective handling of the inventory or stock that the company holds. Inventory management deals the flow of goods from the manufacturers to warehouses and from these facilities to ultimately the point of sale. Retail inventory management is an element of supply chain management and includes aspects such as controlling and overseeing ordering inventory, storage of inventory, and controlling the amount of product for sale. Rightly managing the inventory can help businesses have the right products in the right quantity on hand and avoid products being out of stock and funds being tied up in excess stock. Request Proposal

In this blog, we have discussed the techniques and best practices of inventory management for small business concerns:

Inventory management for small business 

Undertake stock audits

Even if businesses own a good retail inventory management software, it is essential for these companies to undertake physical stock audits at regular intervals. This helps ensure that the company’s physical stock count matches the inventory count in the system.  One of the most popular techniques of inventory management for small business includes annual, year-end physical inventory that counts every single item and ongoing spot-checking, which can be most useful for products that are moving fast or have stocking issues.

Fine-tune forecasting methods

Accurate forecasting is a vital element of inventory management for small businesses. The forecasted sales figures should be largely based on factors such as the historical sales figures, predicted economic growth, market trends, and the promotions and marketing efforts involved.Contact US

Cloud-based stock management software

It is advisable for small businesses to use a retail inventory management software with real-time sales analytics capabilities. Having a cloud-based stock management software also helps employees to access data in real-time and on the go. Such advanced software also ensures that the company’s stock levels are automatically updated and adjusted as when a sale happens, eliminating stock-out or stock overflow situations.

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Quality control

One important rule of stock management is to never compromise on the quality of the product. It could be as simple as assigning a checklist to employees to do a quick examination during stock audits that includes signs of damage and correct product labeling. If damaged products reach the retail shelves or the final customers, chances aRequest Proposalre the brand name could be hampered.

Drop shipping method

Drop shipping is a technique of retail inventory management for small business; wherein, businesses can sell products without actually holding the inventory. Instead, a wholesaler or manufacturer is put in charge for carrying the inventory and shipping the products when a consumer buys from your store.  This way, companies do not have to worry about inventory holding, storage, or fulfillment. Several companies venturing into online platforms adopt drop shipping methods. This supply chain fulfillment strategy can be adopted by many types of businesses across all industries.


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Real World Evidence

Pharmaceutical Retailing Client Leverages Inventory Optimization Solution to Optimize Service Levels for Different Product Categories

pharmaceutical retailing

LONDON: Quantzig, a global analytics services provider, has announced the completion of their latest inventory optimization for a pharmaceutical retailing client. The pharmaceutical retailing industry is concerned with businesses that engage in retailing prescription drugs or patent medicines, toiletries or cosmetics, and prescription medicine dispensing. The pharmaceutical retailing industry is expected to show a significant growth trend in the years to come, as the average age of the consumer for this sector is increasing rapidly. With the rise in the need of the aging population for enhanced healthcare and prescription, there is a constant growth in the customer base of pharmaceutical retailing.

 

“Inventory optimization solutions can help businesses eliminate out-of-stock situations, improve efficiency, and curtail inventory costs. Furthermore, with the help of the solution, companies can gain optimized service levels for different product categories. Additionally, companies can better define processes and monitor and manage high-risk categories.” says an expert at Quantzig.

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The solution offered helped the pharmaceutical retailing client devise advanced processing capabilities to estimate product redeployment between stores and adopt a tiered strategy for providing services. The client was also able to make changes to staffing, fulfillment, and delivery processes to centralize products and inventories with the help of the solution provided.

Additional Benefits of the Inventory Optimization Solution

  • Improve working capital efficiency and reducing inventory while maintaining service levels
  • Reduce inventory costs by carrying the right product at the right time to the right place.
  • To know more, request a proposal

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Inventory Management

Top Tips for Better Warehouse Inventory Management

From the outside, warehouse inventory management seems fairly straightforward. Nothing more than receiving and arranging the inventory so that it could be retrieved quickly when needed. However, inventory management is a lot more than just arrangements. Managers have to maximize productivity, save time, and maintain an optimal level of inventory to improve the profitability and efficiency. The use of RFID tags, barcodes, inventory management systems, and IoT have greatly altered the efficiency of inventory management systems. However, there is still a lot toFree demo be done if a company wants to optimize inventory. Here are some top tips that’ll help you to improve your warehouse inventory management.

Maximize vertical space

Space costs money, the more inventory a company holds, the more they have to pay in terms of real estate and utility cost. However, keeping a lower level of stock is not an obvious solution, as it may impact the customer experience. Consequently, a warehouse has to utilize the available amount of square footage by optimizing layouts. One easy way to increase space is to make better use of the vertical space in your facility without neglecting layout optimization best practices. One useful tip is to place items that move less frequently in harder-to-reach vertical storage areas.

Re-evaluate lead times

Lead times are crucial in any retail and manufacturing sector and have a direct impact on inventory management. Lesser the lead time, lower safety stock of a particular product is required. Lead time should include supply delay and reorder delay. Also, when a company sources from an international supplier instead of local or regional ones, it affects the lead time. It is essential to continuously readjust the lead time whenever such changes take place to optimize the supply chain.

Identify your KPIs

Advancements in modern technology have paved the way for advanced warehouse inventory management, including effective data management and analytics capabilities. To measure performance accurately, managers require clearly defined objectives or KPIs. Managers may not be able to focus on improving each and every KPI, and focusing on one may cut a slack for others. For instance, reducing shipment errors and bringing the operational cost down are conflicting in nature.

Supply chain partner selection

A company’s operational performance is only as good as their supply chain partners. The relationship that you built with suppliers, manufacturers, or wholesalers is crucial. A good relationship with the supplier ensures on-time delivery in good condition. A great response time can help reduce the lead time after all. Also, a great relation often means suppliers can be flexible enough for your needs and having to spend less time back and forth in negotiations and contracts.

Using cloud-based software

The shift towards cloud-based platforms is not a fad, it’s a long-term trend that’s here to stay. This is especially true for a global supply chain who has operations all over the world so that they can collaborate and remotely access all important inventory data. A cloud-based system updates inventory amounts, purchase order, and other information in real time. It also ensures that all the data stays intact even when the physical infrastructure of the company faces the problem.

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Inventory management

Personal Care Retailer market analysis – How inventory optimization solutions helped a personal care product retailer to optimize the physical inventory levels

Inventory OptimizationLONDON: Quantzig, a global analytics services provider, has recently completed their latest inventory optimization solution for a personal care product retailer. The growth of the personal care product segment has boosted the revenues of the retail sector. The rising consumption of personal care products can be owed to increasing emphasis on beautification and personal hygiene. Customers are demanding that the use of chemical substances in the product be reduced leading to increased R&D activities.

“The inventory optimization solution offered by Quantzig assisted the personal care retailer to accurately keep track of the products to better serve the customers. Through an effective inventory management solution, businesses can minimize inventory write-offs and overstocks and increase the overall supply chain efficiency.” says an industry expert from Quantzig.

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The inventory optimization solution assisted clients to efficiently track inventory levels with better visibility into the incoming and outbound delivery. By following industry best practices, the client was able to curtail data entry errors, increase productivity, and lower operational costs. Consequently, they were also able to reduce manual physical inventories and lost sales track due to inaccurate stock levels, inventory write-offs, and shrinkage.

Additional Benefits of the Inventory Optimization Solution

  • Enable to keep track of inventory, orders, and vendors
  • Implement industry best practices to reduce data entry errors
  • Efficiently track inventory levels with better visibility into the incoming and outbound delivery
  • To know more, request a free proposal

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Inventory management

The Best of Inventory Management Techniques – Optimizing Stock Management

Inventory is one of the most dreaded words in the retail sector. It involves lots and lots of counting, reconciling, physical inspection, planning, and forecasting. It’s a simple equation, you buy goods paying money, and you get that money back plus some profits after selling it. The problem lies when the equation is not balanced. If the company fails to sell all of its stock, they will have liabilities lying around. On the other hand, if they cannot cater to customers’ demand and understock, that’s a lost opportunity. So this equation needs to be balanced all the times to optimizeFree demo revenues. Holding up inventory ties up much needed cash for other business functions. As a result, good inventory management is an absolute must in order for a company to prosper.

Setting par levels

One of the most followed inventory management technique is setting up par levels for each product. It is the minimum amount of stock of a particular item to be had at all times. Whenever the inventory dips below the par level, its an indicator to order more of that item. Mostly, managers order the minimum quantity, which gets the stock above the par level. This par level also varies as per how quickly the product sells or how long it takes to reorder. Creating a par level will systemize the process of ordering in the future. As a result, even staffs can make decisions on ordering based on par levels.

FIFO stock method

FIFO, short for first in, first out, is an essential principle in inventory management. As per the rule, the stock that is bought first gets sold first. As a result, the company will mostly have fresh stocks. This rule is even more critical when it comes to perishable goods as it protects the product from spoiling. Another advantage of using FIFO method is that company can cycle through batches faster and get rid of old stock as packaging design and features often change over time.

Manage relationships

Adaptability and speedier operations are the keys to successful inventory management. People handling stocks should be quick enough to return a slow-selling item, restock fast selling product, temporarily expand storage space, or manage the relationships with suppliers. Having a good relationship with the supplier helps a lot as they will be willing to negotiate on MOQ, which eases inventory pressures. The communication with the supplier should be smooth, and information regarding seasonality and sales can be shared to synergize operations.

Contingency plan

The act of inventory management is not static. Multiple problems can arrive at any time for which companies may not be well-prepared. For instance, situations of sales spike, cash flow shortfall, inventory miscalculation, product shortage, can all cause panic for an inventory manager. However, businesses should have a contingency plan in place to be able to react to such situations quickly without causing any hiccups in the inventory management process.

Stock auditing

Today, digital systems have replaced most of the manual paper-based systems. Managers often rely on software and reports to know the stock levels. However, it is important to verify the numbers shown on the screen with the numbers that are actually in the warehouse. It can be done in terms of physical inventory count, spot checking, or cycle counting.

ABC method

Call it 80:20 rule or ABC method; it is evident that some products need more attention than the others. Using ABC analysis can help businesses to prioritize inventory management which ensures that vital items are never ignored.

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healthcare companies

5 Healthcare Inventory Management Techniques to Cut down Cost

The developments of new technology in healthcare is growing at a rapid rate. The healthcare industry revolves around thousands of daily tasks. Numerous patients get admitted every hour who require constant supervision. In the effort to provide superior service and, healthcare companies often ignore keeping track of their inventories. Healthcare companies possess inventories that comprise of perishable goods as well as medical instruments which need to be stocked correctly. Same is the case of miscellaneous hospital equipment which tends to go missing if unsupervised. Often, hospitals lack the capability to accurately estimate the quantity of hospital equipment required at a specific time. Meanwhile, having excess of rental equipment like stretchers and X-ray machines take up space and add to costs. To streamline inventory management techniques and automate supply and medication distribution, hospital executives need to implement best practices such as investing in a hospital supply management system and streamlining inventory management tasks. One of the most critical aspects of any hospital inventory management system is the maximization of technological resources. Here are five tips for healthcare companies to improve inventory management techniques and reduce their overall costs:Free demo

Collect data from the supply chain

Using supply chain data can save healthcare companies billions of dollars. The data can be used to determine if the inventory management techniques used are as cost-effective as they could be. According to a recent survey, supply data has been siloed in the past. However, more healthcare companies are looking to build IT systems that use value-based reimbursement models. Using these value-based models, organizations can more accurately link supplies needed and patient outcomes.

Make responsibilities clear

Employees involved in inventory management must have a strong understanding of his or her role in the function. Be it cleaning the rooms, ordering the supplies, or checking the purchase orders for accuracy; it is essential that the staff in healthcare companies understand what their role is and how it contributes to the success of inventory management techniques.

Better organize supply room

A hospital supply area that is not well maintained can pose a serious hindrance to healthcare inventory management. Disorganization is a bad situation for any supply room of healthcare companies leading to problems ranging from lost revenue caused due to misplaced supplies to not having an ability to tell how much of a particular item is available. It is advisable to organize the supplies in a linear fashion, which makes the frequently used tools easy to find. In order to reduce the amount of wasted materials, try placing products that will expire the soonest towards the front when organizing the supplies.

Adopt a lean strategy 

The inventory management techniques used by healthcare companies have costs outside of the supplies purchasing. There are several factors to be considered in the price. For instance, movement and management costs, expired products, excess supplies, and purchase price variance. A better understanding of the expenses can, in turn, save healthcare companies more money. Implementing a lean supply chain will ensure that healthcare companies have the right number of supplies at the right place when and where they are required.


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Pharmaceutical Retailing

Inventory Optimization Helps A Pharmaceutical Retailing Client Optimize Service Levels for Different Product Categories

Client: A leading pharmaceutical retailing company, Size: $1 billion in revenue, Area of engagement: Inventory optimization

Typically, the pharmaceutical retailing industry consists of businesses that engage in retailing prescription drugs or patent medicines, cosmetics or toiletries, with primary activities including patent medicine, cosmetic, drug, perfume and toiletry retailing; pharmacy retail operation; and prescription medicine dispensing. The pharmaceutical retailing industry is poised for significant growth, as the average age of the consumer is increasing rapidly. QZ- Request free proposalAn aging population needs enhanced health care and prescription needs; thus, providing a growing customer base for pharmaceutical retailing. However, the growth prospects of the pharmaceutical retailing industry are expected to be influenced by a few factors including:

  • Sparse competition: With the increase in competition, payers and PBMs can negotiate with manufacturers as well as improve clinical outcomes. However, if some drugs don’t lose patent protection, there might be double-digit annual price increases.
  • Crippling policies: Existing federal policies hamper the ability of Medicare Advantage (MA) plans to completely leverage drug management tools to achieve lesser costs for beneficiaries. However, they require MA plans to provide the same drug coverage as fee-for-service to encourage prescribers to utilize high-value drug treatments.

Many such factors are compelling pharmaceutical retailing companies to leverage the use of inventory optimization solutions. Inventory optimization solutions help establishments eliminate out-of-stock situations, improve efficiency, and curtail inventory costs.

The Business Challenge

The client, a leading pharmaceutical retailing client with retail units spread across the globe, wanted to achieve its goal of improving working capital efficiency and reducing inventory while maintaining service levels and growing sales. Additionally, they wanted to reduce inventory costs by 10% in a year by carrying the right product at the right time to the right place.

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The Solution and the Business Impact

The inventory optimization engagement helped the pharmaceutical retailing client devise advanced processing capabilities to calculate product redeployment between stores and adopt a tiered strategy in providing services. Additionally, the client was able to make changes to staffing, fulfillment, and delivery processes to centralize products and inventories. This helped them reduce inventory costs by $0.25 million.

Inventory Optimization Solution Insights

Quantzig’s inventory optimization solutions help clients in the pharmaceutical retailing space to optimized service levels for different product categories. Additionally, companies can better define processes and monitor and manage high-risk categories.


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Personal care products

Quantzig’s Inventory Optimization Helps a Renowned Personal Care Products Retailer Improve Supply Chain Efficiency by 10%

The client- A renowned personal care products retailer, Revenue$2.1 billion in revenue, Area of engagement- Inventory optimization

Over the years, the personal care products segment has contributed to a major share of the retail industry’s revenues, owing to the rising emphasis on beautification and personal hygiene. With the growing concern for reducing the usage of chemical substances in the products, leading personal care products manufacturers are planning to invest highly in innovations to develop eco-friendly designs. The personal care products space, at large, will witness a stipulated growth with the growing spending power of the consumers, the influence of international brands, and burgeoning growth of the retail industry. Moreover, the growth in the population and rising demand for luxury products will influence the growth of the personal care products space.

Here are some of the factors that may curtail the growth of the industry over the years.

  • Rising preference for organic care products: In the last couple of the years, the preferences of the consumers have started changing, and they have moved towards the use of organic personal care products. The rising concern regarding the negative health impacts of using synthetic care products is compelling businesses to leverage the use of technological capabilities to streamline their product offerings.
  • Government intervention: The health issues associated with using synthetic care products are compelling retailers to come up with more natural ingredients for human usage. In the US, the FDA is continuously focusing on creating guidelines to determine the safety of the products for the consumers use. The 21CFR laws pertaining to cosmetics also ensure strict regulations on cosmetics production.

To counter such challenges and devise effective ways to maintain consistency in the product offerings, organizations are leveraging inventory management solutions. An inventory management solution helps businesses accurately keep track of the products to better serve the customers. Through an effective inventory management solution, businesses can minimize inventory write-offs and overstocks and increase the overall supply chain efficiency.QZ- Request free proposal

The Business Challenge

The client, a renowned personal care products retailer, wanted to efficiently track inventory levels with better visibility into the incoming and outbound delivery. The client wanted to meet the needs of the customers and make better-informed business decisions. With the help of industry best practices, the client wanted to curtail data entry errors, increase productivity, and lower operational costs. The primary objective of the client was to reduce manual physical inventories and lost sales track due to inaccurate stock levels, inventory write-offs, and shrinkage.  Moreover, the personal care products retailer further wanted to leverage technological capabilities to keep track of their inventory, orders, and vendors.

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The Solution Benefit and the Business Impact

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The inventory management solution offered by Quantzig helped the personal care products retailer maintain order management by monitoring order placements. The client was able to manage and reorder stock through effective purchasing management. In addition, the inventory management solution also helped the client handle sales by managing quotations, invoicing, and receipts. The client was further able to facilitate end-to-end tracking of the products from order to delivery.

Inventory Management Solution Predictive Insights

The inventory management solution offered by Quantzig helped the personal care products retailer better manage inventory levels, replenish stocks, and minimize supply chain costs. The solution further offered ways for the client to strike a balance between working capital, operational costs, and service level.


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