Technology has made life easier in the 21st century. It’s very unlikely not to find the use of technology and electronic devices in almost all aspects of life. The business world has been one of the many beneficially of technological innovation and advancement. Today, starting and running a consumer goods company is not only efficient but also cost-effective.
A good inventory system is a worthwhile investment for a consumer goods company to ensure the company’s inventory is well managed from the initial recording and receipt of goods, stock taking and monitoring, anticipating inventory needs to inventory handling and retrieval. The inventory control system should put stock costs under control by ensuring the smooth and efficient flow of goods in and out of the inventory.
In order to achieve positive cash flow, the system should monitor inventory usage and determine the optimal economic order quantity and avoid capital being held up on stock and loss arising from delays in ordering new products.
Most business software packages in the early days placed more emphasis on functions like sales and accounting that were mostly thought of as being the most important in the business world. In the modern day however, many people have recognized and appreciated the importance of managing and controlling inventory, which is the largest company’s asset. Inventory management is done across the distribution channel from as the time it is in the warehouse to the time the product reaches the consumer.
A distributor of consumer goods should choose the right inventory software that addresses the distribution challenges as well as its customers’ needs. The use of complicated software that your customers have no time or skills to take advantage of the system capabilities reduces your inventory management level of effectiveness.
The first step for a distributor to achieving inventory management goals is by understanding the different distribution channels of the goods and services being offered by the company.
Consumer Goods Distribution Channels
A distribution channel is a path through which goods and services follow from the manufacturers of the goods and made available for use to the end-user. It comprises of interdependent intermediaries that help to move the product from the manufacturer to the consumer.
The distribution channel used by any given company is critical in its marketing campaign. Some distribution strategies are used to give a product a unique position in the market.
The main function of a distribution channel is providing the 3 main utilities which include, time ownership and place utility. Distribution channels make it possible for consumers to receive goods at the place they need them, in quantities they want them and at the right time. Distributors are important intermediaries in the distribution channels. They increase the efficiency of goods and services from producers to consumers by reducing the number of transactions in the distribution channel. This is achieved through buying large quantities of goods from a number of different manufacturers and distributing one or more goods at any given time to many consumers as well as offering a variety of goods in one location.
The distributor performs the storage function. He stores goods from the manufacturer until such a time they are needed by the consumers. There is, therefore, a need to use an inventory management system that places real-time intelligent processing information in the store or warehouse. The layout of the warehouse should be designed with the different types of inventory intended for distribution in mind. A well-organized user-friendly warehouse with equipment that is designed to handle all kinds of stock makes the operation and monitoring of the inventory efficient, which in turn helps to ensure the goods remain in high-quality standards while in the warehouse and during delivery to the client.
Warehouse Storage Facility Tools
To ensure that you fully utilize the warehouse storage system, the following tools are recommended for proper material management and to ensure you get the most out of your facility.
- Stock locator database – The stock locator database can be used by managers to make proactive decisions in a warehouse storage system. Record of the stock number, the number of pallet loads and lot numbers of each storage location can be maintained to coordinate all the operations of the warehouse.
- Communication system – Through a good communication system, the operation of the warehouse can run smoothly with tasks assigned on a visual display and each completed task confirmed through the right output devices.
- Maximizing the storage capacity – A good warehouse system ensures proper utilization of the warehouse space by monitoring and controlling traffic in and out the warehouse as well as having flexible storage arrangements.
The storage functions can be outsourced where a company feels it does not have adequate storage facilities and resources. This can be an advantage in that the company is left to concentrate on manufacturing and other aspects of the business and leave the inventory control to the experts.
The transportation and shipment of the goods from the warehouse to the consumer is a factor to be considered. The nature, quantity, and location of the client are some of the factors to consider when choosing a shipping method. A distributor can decide to use the LTL or FTL shipping services since such services are fast, efficient and can reduce shipping cost.
The Role of the Internet and Technology
Modern technology and the internet have made goods and services to be distributed in all corners of the earth efficiently and in cost-effective strategies. Today E-commerce has made it possible for even the smallest distributing company with limited resources to compete with renowned distribution companies to make their goods and services available internationally at a low cost.
The internet, however, is eliminating most intermediaries and distribution channels with many companies taking up the distribution functions of their product. With a good inventory management system, many consumer goods companies are able to carry out distribution functions effectively, reducing distribution costs and making their products more affordable.
The use of technology can greatly improve the operations of your business. Consumer goods company inventory control systems are available in the market that will ensure the smooth running and management of a company’s inventory and success of your business.
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