The best inventory management processes efficiently facilitate the flow of products in and out of a company. Some organizations choose to implement a single inventory management strategy while others combine several techniques to meet the needs of the company. These strategies are used to create invoices and purchase orders, produce receipts and control the inventory-related financials.
One of the most effective methods of tracking your business’s inventory is through software. Large corporations often customize an inventory management database to suit the needs of their organization. Smaller companies may opt for developed inventory management software. These programs often allow the entire supply chain to view inventory at any given point and place orders.
Many companies choose to hire outside consultants to create and manage the internal inventory systems. This gives them the accountability for ensuring proper receipt and delivery of products. Given that these company’s specialize in inventory management, they can often maximize the efficiency of the process. The consultant is typically responsible for managing accuracy, cycle counts, shipping and receiving and picking. For instance, Meyers Transport Ltd., one of the many trucking companies in Ontario, provides regional truckload services, as well as warehousing and distribution which reduce the amount of inventory their clients manage.
Work in Progress (WIP) Items
Many companies utilize WIP items which allow them to track the units through the various operational stages. For instance, if a tube is being manufactured, WIP items allow the supply chain to track the progress of the item from resin pellets to the molded and decorated tube. In turn, this allows companies to adjust the orders prior to the inventory depleting thus slowing down production.
Supplier-managed inventory is an effective method of tracking inventory levels as it places the accountability of the product onto the vendor. Essentially, the supplier is given access to the company’s inventory data and warehouse. The supplier will continuously monitor the amount of inventory in stock and even cycle-count on a regular basis. When the stock becomes low, the supplier will generate purchase orders based on the requirements of the company. This helps to eliminate data-entry errors and better manage timing.
These are four of the best method of tracking your inventory. Through efficient technology, consultant and supplier assistance and developing a system of WIP items, you can best track inbound and outbound products. Thousands of companies of all sizes around the world utilize these strategies to effectively manage their inventory levels.