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 profitability and efficiency. The use of RFID tags, barcodes, inventory management systems, and IoT has greatly altered the efficiency of inventory management systems. However, there is still a lot to be done if a company wants to optimize inventory. Here are some top tips that’ll help you to improve your warehouse inventory management.
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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.
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Supply Chain Partner Selection
A company’s operational performance is only as good as its 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 that 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 orders, 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.