Sometimes, inventory planning can be a hit and miss situation for business owners and warehouse managers. Do you know how much inventory you have on hand, or how much you need to order? Does your business experience stockouts, delaying shipping times? Do you have too much stock of slow-selling products taking up valuable space in your warehouse?
Every distribution company needs inventory planning to maintain its profitability. Inaccurate inventory can cause expensive problems across all departments within your business.
As a result, you may lose out on additional revenue opportunities, carry unnecessary overhead, and cause you to miss your company goals.
If you manage your inventory correctly, it improves profit and cash flow, so understanding how much inventory you have the amount you need to meet future demands is essential to the overall health of your business.
Let’s take a look at how JD Edwards Managed Services and an ERP helps your business plan and manage inventory issues so you can reach your goals today!
Having no stock on hand can cost your business lost revenue opportunities, and if you are frequently out of stock then you could start to have customer service issues. If your customer orders always arrive late, or the customer can't find what they want at your store, they'll go to your competition.
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Stockouts can be caused by several issues coming together at once, but the most common reasons that lead to a lack of inventory is poor inventory planning during the ordering process.
It would help if you had an effective stock formula to calculate demand forecasting. Here are some ways that you can prevent stockouts to ensure your inventory is always at a healthy operating level
Keeping too much stock in your warehouse will cost your company money, but having too much product on hand can have a big impact on your company’s bottom line as well.
Not only does overstock reduce your cash flow, it also requires your warehouse staff to organize and manage additional goods that are not making your company money.
In some cases, overstocking may result in wasted product, which your company will need to discount or throw away to make room for new inventory.
Perishable items such as chemicals, food, and cosmetics may spoil if they spend too much time on the shelf.
Unsold inventory sitting on warehouse shelves costs your company money and disrupts your business data if you don't take it into account in your reporting.
All products in your warehouse require categorization and tracking to ensure you aren't wasting your warehouse space and costing the company money. Minimize waste and reduce your costs by implementing management processes to understand your inventory levels.
Understand your sales history and prevent overstocking by developing an effective formula to calculate demand forecasts.
Calculating demand forecasting is not necessarily always the issue at hand. If a company is well aware of its stock available in the warehouse, has excellent processes on hand, and keeps abreast of industry trends, then there may be another issue.
Warehouse logistics is an area often left unmonitored in large companies that are dealing with inventory issues.
Vague warehouse procedures result in double work by employees, costing the company money and lost labor time. Warehouses need a defined organizational chart with a hierarchy of authority in management that controls every aspect of the logistics process. Without structure and order, your warehouse will descend into chaos.
Fortunately, there are solutions available to streamline warehouse processes and ensure everything runs smoothly with your inventory planning. Maximize your human resources.
Implementing sustainable practices in your warehouse is the best way to ensure that everyone is on the same page. Complete the following tasks to help you coordinate your business activities and employees in your warehouse.
Automate as many manual processes as possible to prevent human error. The software helps you track orders, manage the logistics process, and the age of products sitting on your shelves.
Improve efficiencies by collaborating with other departments to improve operations.
Ensure that your employees receive the right training in processes to manage their workflow.
It's vital that you take into account all relevant data when implementing your demand forecasting system.
Organizing your data assists you in improving your outcomes while saving both money and time in your warehouse operations.
A critical aspect involved with inventory planning is your people. Everyone involved with the company plays a crucial role in the success of your business. Implementing a training program helps your employees understand their job, improving your warehouse efficiencies, and inventory management.
By holding your employees accountable, you ensure that they adhere to the processes and rules involved with effective inventory management with JD Edwards Managed Services.
No matter the issues facing your distribution business, making use of processes to manage your data, your inventory, and your people, help you clear a path to your business goals.
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