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Inventory Management

Inventory Management

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Inventory Management

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  1. Inventory Management: The Key to Successful Business Planning

  2. Why inventory management is critical • Inventory is one of the biggest assets a company has • Effective inventory control has a direct effect on how successful your business will be • Developing effective inventory management strategies can be a huge competitive advantage • Not having a balanced inventory can be a costly mistake • Better inventory balance • Higher inventory turnover • Accurate planning • Cost savings Effective inventory management leads to:

  3. Different businesses need different strategies in order to be successful First in First Out- Moving older stock first Balancing the need of product availability with carrying cost is essential for successful inventory management Last In First Out- Moving product that is produced last out first Just in Time- Production process begins when the order is received

  4. Tracking key metrics • Inventory on hand • Part history • Aging reports • Initial order fill rate • Measures of overstock • Cost of backorders Be informed about your inventory by keeping track of:

  5. Inventory not managed effectively results in… Excessive inventory Having too much inventory creates: Backorders Unable to fulfill an order when it is needed is costly and can result in: • Cost associate storage and labor • Possible waste of parts • Ties up cash flow and opportunity • Expedited freight charges • Partial shipments • Customer frustration • Loss of customers • Tips • Use an inventory management system that has clear visibility into all aspects of your inventory order fulfillment • Use forecasting to determine purchasing patterns--purchases that are driven by quantity/price breaks may not be saving you money in the long run • Liquidate slow selling and inactive inventory • Track lead times, order history and use min/max levels to keep an eye on inventory and prevent backorders

  6. Be accurate with your inventory Automation reduces human touch and decreases the potential for human error. Automate through labeling parts with barcodes, having bar cording locations, and using RF scanning devices. Automate Cycle count Cycle count on a monthly basis to ensure inventory on hand is accurate. Quality Do your quality processes start at the picking floor? Make sure the supply chain management company you are using has quality processes in place. Simples process such as implementing a double verification process can go a long way.

  7. Turn your inventory management into a competitive advantage by… • Minimizing your carrying costs • Maximizing your order flow • Reducing your waste • Increasing your visibility • Increasing customer satisfaction Cerqa provides a complete supply chain management solution

  8. Cerqa is a global supply chain management company that can assist you with you inventory management. Contact us today to learn more. (512)439-1281