October 26, 2022
Even though sophisticated computer systems allow inventory management to be more streamlined, your company’s needs differ from those of any other. The best inventory management software makes your business’ order fulfillment process run more efficiently and profitably.
Why is inventory management so important?
It’s about customer service
When you overstock, your operating costs escalate as you pay for warehouse space you don’t need. Under-stocking can be even more dangerous. Suppose your product is in great demand and orders are strong. Sales are so strong, in fact, that the warehouse runs out of your product, and it will take several weeks to restock it. Your customers will have to wait. And they don’t like to do that. X Delivery and the Retail Management Institute of Santa Clara University conducted a survey that showed 62% of shoppers expect their orders to arrive in 3 business days. Delivery concerns also led to 56% of abandoned shopping carts. By failing to have a product in the warehouse, ready to ship, you could lose a customer forever.
Efficient planning and ordering of product
A third-party fulfillment company (3PL) will be equipped to handle all of your fulfillment needs. With an automated inventory management system like ours here at Bluegrass we can give clients lots of valuable information. We always ask clients what they want to know. As standard, we send a monthly report on inventory/shipments. But our system can go far beyond that, with the possibility of 150 different reports, as well as the ability to create customized reports. Reports can show the geographical distribution of shipments, month-to-month comparisons, and other specifics.
Our system has automated low-stock notifications. When a client’s inventory reaches a “magic” number, they receive an alert that their stock is low. That number will vary from product to product and from company to company. Clients must come up with that number based on how long it takes to get the item made and how long it takes to get it shipped to our warehouse. Calculating the low-stock number accurately is important. Get it right and you always have items in the warehouse, ready to go.
Accurate information every time
Inventory management software operates in real time. When you log in to the system and look at a report, you see what is happening now, not last week, not 5 hours ago. Inventory management software, used wisely, will make your company quick to adapt to any fluctuations in product demand. You’ll be able to make quick adjustments and changes that could potentially save hundreds, if not thousands, of dollars.
A fulfillment system should store every detail possible about your items. Two biggies are expiration dates and lot numbers. By running reports on expiration dates, you’ll know when it is time to destroy old merchandise. Lot numbers are vital in cases of consumer product recalls. Using lot numbers, you can find out which customers bought the products that have been recalled and contact them.
What are the benefits of outsourcing your inventory management?
Pay for the space you use
Flexible storage space is one of the most significant benefits of outsourcing inventory. You no longer have to worry about leasing a warehouse and running into issues with your stock not fitting or paying for empty space. A 3PL can offer you flexible warehousing that allows using more room during peak periods while lessening use at other times when needed.
Inventory handling is one of the most important aspects of running any business. Your 3PL can bring skills that will reduce broken, bent, or missing items which means less shrinkage and higher profits for your business. Warehouse staff is trained on how to handle fragile goods, product spoilage, and other special needs. They know the questions that need to be asked.
Here are a few things you should talk to your fulfillment professional about before the first pallet of your inventory arrives at their warehouse:
- Describe your product. What does it do? Who uses it? How much does it weigh? Is it fragile? Does it involve any hazardous materials?
- Does it require a particular level of humidity or range of temperature? Does it have to be stored in a particular way?
- How long it takes to replenish your stock? Do orders vary seasonally?
- When does your product become outdated? When it is “spoiled,” what would you like for us to do with it?
Receive custom reports
We design a portal that gives our clients all the access they want to our inventory system. Our system has 150 standard reports and if the standard reports don’t suit your needs, custom reports can be created. Need to pick up on geographical sales patterns? Ask for a shipping report. Want to see how much a Memorial Day promotion generated in sales? Request a report keyed to the sale’s promo code. There are many, many reports, and many ways to use them. Some of our clients want access to only a few pieces of information; others want to be able to see everything the system offers. We can design it either way or somewhere in between. We can even add your company logo to the system to further personalize it.
Let show you how our inventory management system could help you run your business better. We are just an email or phone call away.