May 1, 2018
By Jason Cope
Every manufacturer and distributor aim for that perfect balance between supply and demand. The only reason you want to have a large quantity of stock is when you have high product turnover; low storage versus high transportation costs; and suppliers with long timelines. Conversely, you want minimum stock if you are dealing with immediate supplier delivery time; low order costs; and high-cost, slow-moving stock items.
If only it were that straightforward.
Internal and external factors can throw that balance off-kilter, so what is the best way to efficiently manage your stock? The answer is a blend of hands-on management practices and a good stock management software system that can help you avoid waste and hit your numbers.
Value of a Stock Management System
A stock control management system provides a solution for the effective movement and storage of your goods. When you have clear visibility of your stock levels, you’ll reduce waste and serve your customers better.
While inventory management software systems also account for the raw materials and components used in the production of the goods you stock, they also offer great value for tracking managing stock, identifying deficiencies and redundancies and decreasing carrying costs.
When you can use inventory software to track your products through the supply chain, you’re far more likely to achieve your revenue goals.
With these goals in mind, here are five ways you can use software management systems to manage the stock you distribute more effectively.
Management software helps you manage optimal stock levels at your warehouse by predicting future capacity requirements. For example, let’s say you are considering opening a new regional warehouse to be closer to a particular customer. The right software can help determine whether your investment will achieve the desired efficiencies. Sometimes the improved service and delivery time will be worth the additional investment while other locations can be effectively served from your existing warehouse.
- Customer Service
Speaking of customer service, an effective stock management system will help you reduce the time it takes to replenish stock and process shipments. Your customers will be pleased with the improved speed, and you will not be sacrificing quality in meeting their needs. When your product is available when they need it, you ensure long-term loyalty to your company.
As you grow your business, your stock management software should grow with you without causing you to incur great hardware and software expenses. Whether you introduce more products or sell products to a wider customer base, the right stock management system should be able to keep pace with your business.
- Cost Controls
If you have products just sitting in your warehouse, they become a liability that will chip away at your profitability. When you can manage stock requirements in real-time, you can better manage warehouse space to improve margins. Also, consider freight costs. With good stock controls in place, you’ll avoid last-minute emergencies. You’ll also be able to release and optimize space to increase profitability per square feet of storage.
- Quality Control
Last, but very important, you need to monitor the quality of the products you stock. You can use management software for running analytic reports to see where you can improve efficiencies and spot problems before they occur
Remember, having an optimal stock supply will free up your cash flow. Even if your distribution needs are fairly complex, you should be able to integrate management software into your processes.
Note: This content is accurate as of the date published above and is subject to change. Please seek professional advice before acting on any matter contained in this article.