In the last few years, the ability of businesses to acquire supplies has been hampered drastically. Whether it be inflationary pressures, global conflicts, or pandemics, the notion of Optimising Inventory Management has become a critical part of many industries.
Early adopters of Optimising Inventory Management, such as Toyota, present us with a range of different ways to effectively manage inventory and stock, with minimal detriment to the business.
Let’s explore some of the strategies that can be taken to manage inventories and explore how they may be relevant to business today. Perhaps some of these strategies of Optimising Inventory Management may be useful for your business?
Table of Contents
Use Technology Effectively, not Excessively
While technology can present many opportunities for businesses to enhance systems, often, it’s good to invest your money into effective products, rather than excessive products. For example, a small business may not need a forklift – however, it may be appropriate for a warehouse.
These needs are different for every business and having the right tools for the job can benefit your business massively. Additionally, new inventory management systems in Australia are providing the capacity for businesses to enhance inventory management in customer-facing and internal scenarios.
Needs ultimately vary across many businesses – so let us consider a small food stall. With a single operator and checkout, perhaps a simple cash register for managing sales would be effective. As needs grow, perhaps a larger store is opened, and further investment in more advanced technologies such as additional checkouts should be considered.
Invest in Analytics Capacity
In recent years, the volume of data that has become available to businesses has gotten massive. From digitized invoicing to digital stocktaking, options to collate massive amounts of data have become available to businesses.
However, data collection is only one piece of the puzzle. It’s critical that businesses consider investing in analytical capacity. This can assist businesses in making cost-effective and appropriate decisions for their businesses.
For example, analyzing sales data can allow businesses to identify products that may not be performing as expected. Analyzing sales trends can enable businesses to manage staff rostering effectively – enabling inventory management and employee rostering systems to work in tandem for better business outcomes.
Don’t underestimate the impact that data can have on your business – in an ever-changing world, gaining effective insights into data can yield critical gains.
Don’t Get Complacent
It is essential that businesses stay on top of trends and industry changes. As new technology develops, the capacity for a business to adapt inventory to respond to these changes can be key to the survival of a business.
Take, for example, the development of the original iPhone in 2007. While it is common for historians to reflect on the substantial impact that it and subsequent smartphone development has had on the inventories of phone makers in the fifteen years since, there were many, many phone companies that failed to understand the trend toward smartphones.
Blackberry, a competitor, previously the market leader in telecommunications technologies, became a victim of the failure to adapt to change. This complacency as a market leader ultimately resulted in the shuttering of the brand in 2016.
While a simple concept, it bears repeating: Don’t get complacent!
Review Inventory Needs Regularly
Another way that businesses can be successful in managing inventories is by regularly reviewing inventory requirements. As businesses change, the supplies that a business may need will naturally change and involve. Perhaps it’s a new supply of semiconductors or new personal protective equipment for teams.
By reviewing business inventory needs periodically, pitfalls such as unnecessary ordering can be avoided. It also provides a valuable data point for analytics, potentially providing the framework for systems to predict when supplies need replenishment and replacement.
Truly, there is no one solution for all inventory optimization strategies for business. What a baker, a butcher, and a warehouse manager need are varied and wide. However, it is hoped that this guide provides a kick start to thinking about how inventory can be considered a utility asset for your business.
Do you have an inventory strategy that you use for your business? Have you experienced an issue with inventory management in the past? I’d love to hear your stories in the comments below.