Growing an existing small business requires having the inventory prepared and on hand to meet customer demand. It may seem like an easy process but balancing that stock to align to your existing supply chain capabilities is difficult.
Without real-time data, you may end up running into issues such as an overabundance of materials or worse, underabundance. Here are a few strategies that can help balance inventory numbers to match your business scale.
Change Your Mentality About Out-of-Stock Items
It is easy to assume that being out of stock on products is a great sign. Products are being purchased quickly and are hot customer choices. However, people who purchase products online are not going to wait for a business to restock. Instead, they will abandon the cart and shop at another place for business that has the stock on hand.
While knowing which items are in demand is a good starting point, your out-of-stock numbers should not be the defining variable. Instead, they use of inventory management software will provide you with better analysis in terms of sales orders and seasonality. You will know which items are being purchased the most without ever losing track of the orders.
Stock Inventory Accurately
Missing sales and manufacturing disruptions can harm your brand reputation. Customers will not return to an organization that can’t fulfill their needs. Customers will also communicate to others about how they had a poor experience shopping. This issue can lead to a ripple effect where fewer customers will shop at your business. Another issue may be that you have the inventory, but you have an unorganized warehouse.
The product could have been stocked incorrectly on unorganized shelving. Sometimes inventory numbers may also have been entered incorrectly into systems. For example, your inventory reporting will show there are no products available but there are plenty of products still available.
Investing in automated tracking methods could also be beneficial for improving accuracy. Tagging inventory and using real-time tools, such as barcode scanning will immediately update your reporting.
Outsource Inventory to Fulfillment Centers
If your operations are still having issues meeting customer demands, hiring a third-party logistics and fulfillment could be an option. These companies have the warehouse space, staff, and carrier network partnerships on hand to store your inventory. They can also determine the lowest cost with carriers so your product can take the most efficient route. You can order the volume of raw materials you need without overstocking items.
Having order delays can disrupt your manufacturing operations and lead to a damaged reputation. Update the way you want to store your inventory, create product demand forecasts, and track inventory movement throughout your logistics network. These strategies can help improve the accuracy of inventory numbers to help meet the demand of your growing organization. Make sure to check out the accompanying resource for more information on inventory management.
Infographic created by WSI
Author bio: Beau Christian is Director of Marketing at WSI, a leading third-party logistics provider that specializes in fulfillment, chemical warehousing, transloading, transportation, and more. Having the 17th-largest 3PL network in the United States, spanning more than 15 million square feet, WSI delivers tailored end-to-end supply chain solutions to customers who seek to increase efficiency, shorten lead times, deliver more reliable performance and minimize costs.