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Inventory Management

Command and control your inventory

Delight customers, vendors, and employees with fast and accurate fulfillment.

Don't let too much—or too little—inventory hurt your business

Loss of sales and spiralling costs make poor inventory management a major problem.

Not having enough stock results in out-of-stock situations. Orders come in, you don’t have the items the customer wants, and then a scramble ensues to expedite higher-priced replenishment—or, possibly even worse, you lose the sale to a competitor who has the desired stock available Out-of-stock situations carry opportunity costs: the opportunity to sell at the best price, and the opportunity to sell at all.

On the other hand, holding excess stock carries costs because the inventory you stock has to be warehoused, insured, secured against shrinkage, depreciated, and taxed as an asset. Excess items generally cost the business an additional 25% to 50% per year. Excess stock carries opportunity costs as well: the working capital tied up in unsold inventory is unavailable for other purposes.

Just-in-time inventory management

Just-in-time inventory management (JIT) is a strategy used to increase company efficiency by stocking a product only as it’s needed for sale. Reducing the amount of inventory stored in the warehouse allows you to avoid product waste due to damage or expiration while decreasing the costs incurred housing and maintaining unsold inventory.

How to improve inventory management

Improving inventory management requires increasing command of your warehouse operations and the physical stock inside it. Here are four things you can work on right away that will improve your inventory management:

1. Evaluate your current practices

Before you can make improvements, take an overall look at your current practices. Effective inventory management is purpose-driven. Understanding what each link in the chain does—and why—allows you to hone in on the specific aspects of your system that need improving. Try consulting with other members of your team to identify potential problem areas and start there.

2. Perform routine stock reviews

A major part of inventory management is simply knowing how much of each item you have in stock. Tracking what you bought against what you sold won’t give you the full picture. Items can get lost, stolen, or damaged after they enter the warehouse—it’s unavoidable. And often, lost items go unreported until the right person takes notice. Remedy this problem by routinely reviewing your physical inventory for accuracy with your records.

3. Systematise stock replenishment

Having a system in place for restocking your inventory ensures you’re never completely out of stock. It’s crucial for the smooth flow of a product during busy periods. If you’re not using the just-in-time strategy, you should have a policy to replenish inventory at set levels. Anytime stock of an item falls below a certain number, get the order in. Systematising the replenishment process avoids having a lapse in product availability between the time you order and receive the shipment.

4. Learn customer behaviour

Start keeping track of how often you’re restocking certain items and try to identify any trends or patterns. Depending on your industry, there may be seasonal or other external factors that affect your product flow. Note the periods when customers are ordering more and when they’re ordering less. Having a solid handle on how your customers behave allows you to stay ahead of the dry spells and mad rushes so you can work on maintaining the right inventory balance at all times.

Why you need better inventory management software

Taking charge of your inventory challenges could be the key to growing your profits.

Keep costs under control

Take charge of your expenditure to ensure your small business stays profitable in an often unpredictable operating environment.

Get your stock right

Easily accessible live data allows you to make better decisions about what to stock, pricing and discontinued items.

Take charge of purchasing

Automate key elements of your purchasing process, including replenishment and records of all purchase orders, and build up accurate data to make critical decisions.

Run every area of your services business

Sage Business Cloud Enterprise Management

Business management for enterprises. Domestic or International, mobile and web, in the cloud or on-premise.

  • A single solution for your managing core business processes including inventory, sales, customer service, finances, and more
  • Collaborate across divisions, countries, multiple sites, languages and legislation
  • Manage financial operations with general ledger, cost accounting, and budgeting
  • Control procurement, cash flow and business purchases
  • Get a complete view of your customers across sales, marketing, customer service and support
  • Ideal for manufacturing, wholesale distribution, and service processes
Go to Enterprise Management
Sage 300cloud

An end-to-end business management solution that unlocks your company’s potential, reduces costs and improves performance with enhanced business visibility.

  • Intuitive system that gives you a unified view of your business, including personalised KPI dashboards
  • Scalable solution which is highly flexible and configurable to give you freedom of choice
  • Cost-effective with a low total cost of ownership, regardless of complexity, scale or deployment requirements
  • Anytime, anywhere access to transactional data
  • Faster, more informed collaboration and decision making with powerful analysis and reporting capabilities
  • Powerful financial management capabilities and automated businesses processes
Go to Sage 300cloud

What can inventory management software do for your business?

Delight customers

Today's digital-savvy customers can instantly compare retailers’ prices online, wherever they are. These comparisons automatically increase pressure on prices, so retailers, distributors and manufacturers often attempt to stand out based on the quality of service they provide.

You can fulfill customer orders quickly and accurately if you have instant insight into stock levels, customer details, shipping information and more.

Get paid faster

Fulfilling orders faster means you can get paid faster, but keeping on top of invoicing and records of purchase orders can be a time-intensive process, often causing delays and impacting on your cash flow. Automate the process using powerful systems with accurate live data to make collecting payments a breeze.

Maximise profit margins

Making sure you have the right stock, in the right amount, at the right time is one of the biggest inventory management challenges you'll face. Running out, or ending up with excess stock, can prove hugely costly. With the right solution, you can analyse live sales and inventory data instantly to produce quality forecasts in no time at all. This way of working will help you hit your target fill rates, minimise stock-outs, and get the maximum value from your inventory.

Manage a more efficient growing business

Better insight into—and oversight of—your inventory can deliver benefits right across your business. With more accurate forecasting and the automation of many routine tasks, you'll free up time and working capital to invest where it's needed most. And with instant access to live data whenever and wherever you need it, you'll be able to make better decisions across your supply chain.

Do you want business advice on managing your inventory and supply chain?

Read our articles, guides, expert tips and more.

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