Businesses around the world are moving towards the automation of their unique workflows. However, the one size fits all strategy often disrupts set processes or leads brands to make adjustments to mold into such solutions. The problem deepens when it comes to selling online, especially for the backend teams. Areas like inventory management, stock keeping, and delivery tracking need a much more sophisticated solution.
Here's where the concept of customized inventory management fills the latent void. But before we understand custom techniques for inventory management, let's set some context.
With third-party applications involved or complex delivery systems ahead, inventory integrations need to have a customized solution.
A customized solution can deploy changed workflows easily and enable continuous tracking of the business processes involved.
When creating a customized wholesale inventory management system, it is important to build around some pre-defined templates. These techniques can then be tweaked per a brands requirements. Some of the best techniques for inventory management include:
Stocks are categorized using ABC analysis in inventory control according to their value, price, and sales volume. These standards dictate how many products a business will put into the market. As its name implies, it is divided into the following groups:
With this analysis, companies can take care of their high-value products, ensure continuous in-flow and stock for high-selling products and reduce costs and losses.
The procedures of First-in, First-out (FIFO) and Last-in, First-out (LIFO) can be used to estimate the cost of products sold. While LIFO believes the last unit to arrive, or newer inventory, has priority, FIFO encourages the oldest inventory to be sold first. While LIFO can stop things from going bad, FIFO is a great approach to keeping inventories current.
Although each method has benefits, LIFO is not always feasible for all businesses (because some would prefer not to have their older product sitting around in stock). Because FIFO ensures that the oldest products leave the warehouse before anything else, it is employed more frequently.
A safety stock is an extra set of commodities kept on hand as a safeguard against the unpredictability of the market. It involves inventory management for additional inventory that is ordered and kept on hand in case the business runs out of supplies for replenishment. This lessens the likelihood of stock-outs, which are frequently brought on by bad forecasts or unanticipated changes in client demand.
Using just-in-time (JIT) inventory management, businesses can place supplier orders for raw materials in tandem with their production schedules. Since new products are delivered to businesses only when they are actually needed, using the JIT technique is a terrific way to cut expenses and avoid ordering excess inventory.
Your money and resources will likely be wasted on inventory that doesn’t sell, but companies that use the JIT technique benefit from increased productivity and reduced waste. You can reduce inventory expenses and profit from a more effective warehouse/distribution flow by just acquiring goods as they are required for the production process.
The phrase “economic order quantity” (EOQ) refers to the optimal quantity that a business should buy to reduce its inventory costs, such as shortage or carrying costs. The economic order quantity formula is used to determine the most units required (per order) to reduce purchasing with the overall purpose of reducing spending.
The EOQ model’s tailored recommendations for your specific business are one of its main advantages. Sometimes, EOQ may recommend making a larger purchase to benefit from discounted bulk purchasing and to cut down on total costs associated with multiple shipments.
Using these techniques, brands can segue into customized inventory management. An FMCG company, for instance, can work its inventory around the LIFO and FIFO templates, altering the flows based on the kind of food product and the location of delivery.
A few things to keep in mind before you get into the whole customization process includes:
If you want to get wholesale inventory management customization, experts at OrderCircle can help you out. Get a free demo of the product and understand where to begin. Click here to book your slot.
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