How Improving Inventory and Supply Chain Can Help Your Company
The main purpose of inventory management is to ensure your company has the right amount of products available to satisfy demand. Without enough stock, customers cannot order the products they need, and your company can suffer a loss in revenue or profits.
A well-designed inventory management system helps you track your inventory across your network and systems. This will ensure you get accurate order counts, maintain optimal inventory levels, and avoid losses from shipping, warehousing, and distribution issues.
Cost
Inventory control is a critical part of managing your supply chain. Having the right products and materials at hand can boost your business and increase customer satisfaction and profits.
Improved inventory and supply chain management can save your company money. It can also help your team focus on the more important aspects of their job, like sales.
One way to reduce costs is by reducing the inventory you need to hold in your warehouse. This can be achieved through a few different methods.
For example, if you work with suppliers that deliver goods regularly over time, this can help you to reduce your inventory holding costs.
Another way to reduce your inventory is to cut down on lead times. Waiting around for a supplier to ship you an order can be expensive in terms of the product cost and the space it takes up in your warehouse.
Customer Service
Good customer service is a critical differentiator for customers and businesses alike. Over 60 percent of consumers would defect to a competitor after just one bad experience, and 76 percent will switch brands after two negative experiences.
Excellent customer service involves proactive communication, troubleshooting, and problem-solving at the early stages of a customer’s experience with your brand. This helps to avoid problems before they begin, saving time and money for your support team.
Your employees need deep knowledge of your product and services to provide the best customer service. They also need to be confident in understanding and solving customer issues.
A positive attitude and strong empathy are also key customer-service qualities. These can help build an emotional bond between you and your customer, which is critical for delivering solutions that truly benefit them.
Availability
Having the right inventory is key to business success. Keeping track of what you have on hand is essential for day-to-day operations and spikes in sales, and long-term inventory planning. This is where inventory management software comes into play and is one of the best investments you can make for your bottom line. A good inventory management system should provide you with an inventory tally for the duration of your business and at any given time, from large-scale warehouses to smaller pick-and-pack facilities. You want this data at your fingertips so you can take control of the supply chain and focus on what matters – making your customers happy.
Keeping track of your most valuable assets is the name of the game in a highly competitive industry.
Flexibility
Flexibility is changing your inventory and supply chain in response to market changes. For example, if your company decides to move into a new business line or launch new SKUs, you want the ability to adapt quickly to those changes.
However, many companies cannot easily adjust their inventory levels or production targets. This can create shortages or excess inventory.
When an industrial company customizes a vehicle, for instance, the number of parts and raw materials it uses to produce the car can be high, especially if specialized features need to be added.
To improve flexibility, companies can adopt a new planning approach that uses flexible kits to classify parts needed for specialized models. This method allows companies to better predict their supply needs and plan for future production.