The goals of good inventory management are to ensure that the relevant products are available in accurate quantities at the right time. Meanwhile, it also minimises waste and maximises profits. An inventory management system is critical for any business, but it can be incredibly challenging for small businesses with limited resources.
Focusing on these goals can streamline your inventory management process and keep your business running smoothly.
What Are the Top 5 Goals of an Inventory Management System
If you’ve been on the fence about using an inventory management system, these goals will help clear the air.
A well-organised warehouse is key to good inventory management. Keeping items sorted and easy to find can reduce the time spent searching for things and improve efficiency overall. A Warehouse Management System (WMS) can be a valuable tool in helping to keep your warehouse organised. A WMS can track inventory levels and movements, so you constantly know what you have on hand and where it is located.
It can also help with order picking by providing real-time updates on stock levels and suggesting the most efficient route through the warehouse. In short, a WMS can help you save time and money by streamlining your warehouse operations. As such, it is a critical tool for any organisation that wants to improve its inventory management.
Another goal of good inventory management is accurate planning. This is better achieved if your process is digitised and automated. A WMS can provide the data you require to make informed decisions about your inventory levels.
It can also help automate many tasks associated with inventory management, such as reordering and stocking. In addition, an automated WMS can help improve your inventory planning accuracy by providing real-time data on stock levels and demand.
An effective inventory management system can help streamline processes and improve employee efficiency. It aims to ensure that employees have the right products and materials on hand when they need them. This means having an accurate and up-to-date inventory and a system in place for reordering stock as needed.
Smart solutions such as RFID tags, warehouse labels and barcode scanners can help to make inventory management more efficient by reducing errors and increasing accuracy. By equipping employees with the right tools, businesses can empower them to work more efficiently and effectively.
One of the most critical goals of an inventory management system is to be ready with an adequate amount of inventory on hand at all times. However, a surplus of inventory can tie up funds and increase storage costs. Meanwhile, too little can result in lost sales and unhappy customers. The key is to strike a balance, and that’s where inventory tracking comes in.
By keeping track of when and what’s being sold, businesses can ensure they always have the right inventory. Modern warehouse management systems (WMS) make it easier to track inventory levels and ensure that businesses always have the products they need.
A high inventory turnover ratio is ideal for inventory management because it indicates that your company sells products promptly. It also ensures you keep a little working capital in unsold inventory. The cost of goods sold (COGS) is divided by the average inventory level to determine inventory turnover.
A higher turnover ratio means that your company is selling its products faster and is not carrying excess inventory. This can free up working capital that one can use to invest in other areas of the business or to pay down debt. In addition, a high inventory turnover ratio can also help to prevent product spoilage or obsolescence.
An inventory management system can benefit businesses in the long run. If you find these goals up to your liking, you are probably ready to incorporate technologies like WMS to enhance your inventory management game. Contact Qbasis for hassle-free inventory management solutions.