The use of inventory optimization software is one of the most popular ways of increasing productivity in any industrial sector. The use of inventory optimization aims to keep the lowest level of on-hand stock available, with as close to a 100 percent fill rate as possible. Factory Physics reports the use of inventory optimization can have a positive effect on the number of products produced and stored at any company. Syncron explains the use of inventory optimization software combined with the best practices can provide several benefits, including:
- Less supply chain disruption
- Preparation for future orders
- Forecasting future demand
1. Introduce ABC Analysis
The use of inventory optimization is positive for companies looking to change the way they categorize their inventory. By prioritizing the available stock, a company has the chance to ensure they have the most important inventory available. The use of the ABC analysis process gives you the chance to track your stock levels by order of importance. The most important stock is recorded in the top category. This is one of the most popular ways of recording stock levels, with the importance of products seeing them drop down the alphabet until they reach their required level.
2. Introduce Seasonal Categories
The introduction of the ABC analysis categories is just one of the ways your stock can be categorized. In the retail industry, a company may find itself working on different products depending on the season. It is possible to use the latest software to add notes to your products and mark them as important for specific times of the year. By choosing to add seasonally available products to your range of products, you will be able to sub-categorize your products for greater functionality.
3. Automation is King
The use of barcoding is an important part of introducing inventory optimization to your company. Automating the process of optimizing your inventory leads to greater success in taking your company forward in a successful way. Automation takes the problem of inputting each item into a database by using barcodes and other POS technology to provide ease of access to information regarding your products.
4. Create your Custom Order Size
Whether you are using inventory optimization in a manufacturing or retail setting, you can use optimization to help you achieve your goals. In terms of the ordering of products and raw materials, the use of inventory optimization can make it easy for you to create a better way of fulfilling orders. Ordering raw materials for your company can be completed using automated techniques, but this does not mean you need to order a minimum quantity. Expanding your inventory optimization techniques can include only ordering raw materials when you reach a specific level of need to ensure you take advantage of the requirements of your suppliers. In the manufacturing industry, suppliers will often provide discounts when specific order size is placed to save your company money on raw materials.
5. Use Information to Improve Warehouse Practices
The use of inventory optimization is a key part of the development of a warehouse that works for your company in terms of providing your employees with the simplest tasks. A warehouse can be planned for efficiency using the data that is made available using the information made available in the reports that can be generated using the software that is available for your company.
If you are looking to create a high-quality warehouse process, you will be able to position products of importance close to the workspaces of warehouse employees. Products that are often ordered together can be positioned close to each other, with less popular products moved to less prominent areas of the warehouse.
6. Switch to Batch Tracking
The use of batch tracking is one of the practices that is used by successful companies in the manufacturing sector. The batch tracking technique fits into the inventory optimization sector through the use of tracking numbers to monitor goods that were created together by your company. In most cases, the use of batch tracking is used to allow your company to know when the next batch of a product needs to be manufactured.
7. Consider the use of Safety Stock
Running a successful company includes making sure every item ordered can be shipped as quickly as possible. Large orders can wipe out the reserves of a product, leaving your company with no way of fulfilling orders until stock arrives in your warehouse. Safety stock is a small supply of products held in reserve that allows you to complete orders when you have seen a large order placed with your company. Using inventory optimization techniques to maintain safety stock levels leaves you with the confidence your company will have the ability to complete orders no matter how large they may be.
