If you are a logistics or supply chain manager, it’s essential to understand the importance of inventory flow and management, especially as it pertains to your warehousing. the efficient storage and movement of your product through the supply chain will mean less cost, more profit, and happier customers.
What is Inventory Flow and Management?
Inventory flow and management is a crucial part of supply chain management. It refers to the process of ordering, storing, and using your inventory. Some of the best inventory flow and management techniques include the following:
Performing a Stock Audit
Even if you have a great inventory management software, it’s vital to count your inventory to ensure the stock you think you have matches what you actually have. Consider implementing year-end physical inventory counts on an annual basis and regularly spot checking your items.
Regular stock audits, especially when goods are being stored in a public warehouse, are critical. Inaccurate inventory count could have purchasing ordering unnecessary inventory items. This can hurt cashflow as overstocked items will use today’s cash and sit longer on the shelves. Additionally, you may incur extra warehousing cost due to greater demand for space.
Forecasting Inventory Demands
By forecasting demand, you’ll be able to get an idea of how much inventory you’ll need and how much storage space it will require. We recommend storing 1.5 times the average use of the product in demand. Customer order history and other data can help you forecast inventory demands. When utilizing a public warehouse, look at the stocking frequency. If you’re regularly stocking a small space, you’ll likely save more in transportation costs by increasing your physical storage space, reducing the need to frequently restock.
Creating an Inventory Budget
Work with upper management to create an annual inventory budget. This should include the total cost it’ll take to keep inventory on hand during the year. Your budget may include materials cost, carrying costs, logistics costs, and fixed operational costs.
How Inventory Management Tools Can Help
In addition to taking advantage of some inventory flow and management techniques, there are a number of tools that can help you optimize your inventory process. When utilizing a public warehouse, you should have account access and visibility to their warehouse management software.
Where Amware Can Add Value
As a full-service 3PL, we act as the transportation logistics arm of the supply chain for many of our clients. By leveraging our public warehousing options in combination with our LTL and FTL shipping services, clients seeking to streamline and optimize their inventory flow and management are experiencing great results. Additionally, many are reducing supply chain costs by consolidating services.
To find out how Amware can add value to your supply chain logistics and inventory flow and management, contact us today!