Inventory management is one of the keys in turning a small business into a large, successful corporation that’s able to generate millions of dollars in annual revenue. However, the act of scaling doesn’t come without its own set of hurdles. If your business is in the food distribution, ecommerce, consumer goods, or electronic devices industry, it’s time to listen up. Inventory management is of the utmost concern.
For restaurants, schools, supermarkets, and other organizations that interact with and rely on food on a daily basis, inventory management is vital. There is a very fine line between having too much and too little.
According to the National Food Service Management Institute’s Inventory Management and Tracking Reference Guide, “Food and supplies purchased, but not immediately used (inventories), often represent a significant portion of operational revenue.” The guide continues,“One classic method of controlling food cost is to maintain inventory levels high enough to ensure menu items can be produced in the right quantity, but low enough to not have excess product sitting in storage. This is called inventory control.”
While excess inventory in many industries is nothing more than an inconvenience, too much inventory in the food distribution industry often means wasted money and/or health concerns. Excess inventory over extended periods of time can lead to spoiled food that has to be thrown away.
On the other hand, not having enough inventory can also cause financial setbacks. If you aren’t able to accurately forecast demand levels, you won’t be able to supply customers with the meals, ingredients, or supplies they need.
There are dozens of different strategies for enhancing inventory management and forecasting accuracy in the food industry, but it all comes down to the organizations, budget constraints, and industry regulations. Regardless, it’s clear that inventory management is important to businesses and organizations involved in food distribution; ignore it at your own peril.
Inventory management is rather unique to ecommerce businesses, because very few actually physically maintain their own inventories. Unless they also have a physical retail presence, many choose to drop ship. However, whether you maintain your own warehouse or use a third-party partner, maintaining proper inventory levels is critical to success.
One of the single biggest challenges for ecommerce businesses is that they have to deal with global distribution and around-the-clock order processing. For example, a company based out of Nashville, Tennessee – with office hours of 9am-5pm central time – must be able to fulfill an order for a customer in Shanghai who completes an order at 1am central time.
“The nature of online businesses is drastically different in scale and operations,” says Entrepreneurial Insights.“As a result, the scale of inventory also ranges from massive, multiple warehouses to stock kept in a home garage. Regardless of the nature of the operation, it is vital to keep accurate records and track of the inventory at all times.”
For ecommerce businesses, it all comes down to choosing the right platform and software solution that’s able to cohesively synchronize inventory across multiple channels and provide real-time updates for top-down visibility.
For physical retailers in the consumer goods industry, inventory management is tricky. This is due in large part to the volatility of forecasting. Seasonal changes are especially important, as different times require totally different inventory levels. However, while proper inventory management isn’t something all consumer goods companies have mastered, the majority realizes the significance of shoring up this area of their businesses.
Consider the following findings from a recent report, Inventory Optimization: Still a Supply Chain Priority.
- While 69 percent of companies still rely on static spreadsheets and archaic programs, 69 percent of company vice presidents rank inventory optimization as one of their organization’s top priorities.
- Improving customer service is cited as the primary reason for implementing an inventory optimization system that enhances forecasting accuracy.
- One of the top new initiatives for organizations is the need to integrate sales and operations planning with inventory optimization.
“The research clearly shows a large opportunity for consumer goods companies to improve their supply chains through more advanced inventory optimization initiatives,” says industry expert Mike Edenfield. “Inventory optimization’s proven benefits, including cost reduction and improved customer service, are critical in today’s dynamic global market.”
Organizations in the electronic devices industry especially need better inventory management controls. Depending on the types of products a company sells, individual units can cost hundreds or thousands of dollars. As a result, under or over-forecasting is much more costly than it is to a consumer goods company with SKUs that only cost pennies on the dollar.
But inventory management isn’t all about monitoring inventory levels and forecasting demand. There’s also a major need for things like location tracking, financial management, and customer management. Having a robust software solution that handles every phase of inventory – all the way from the stocking process to anticipating future needs – allows companies to establish sustainable businesses that can withstand occasional miscalculations and errors.
Don’t Look Past Inventory Management
Whether your business is involved with food distribution, ecommerce sales, consumer goods, electronic devices, or anything in between, it’s incredibly important that you pay attention to the value of proper inventory management. Spreadsheets may have worked in the past, but today’s marketplace is much faster paced. If you want to succeed, you need the right tools.
Contact QStock Inventory Today
QStock Inventory is a sophisticated barcoding and inventory control software that offers real-time visibility and integration with existing financial platforms like QuickBooks and Intaact. If you operate in one of the industries mentioned above, you’re in luck. We specialize in serving organizations involved in food distribution, ecommerce, consumer goods, and electronic devices.
When you choose QStock, you get seamless integration, the ability to achieve order accuracy of 99 percent or better, efficient systems for accurate outbound shipments, the ability to reduce inventory loss by 80-85 percent, and a long list of other benefits. For additional information regarding our solutions, please contact us today. We’d be happy to discuss their value in more detail.