Do you have a business? Maybe you’ve started one. If so then you’ll want to know all about inventory management. This is the process of gathering materials for your business and keeping track of them.
There are four main types of inventory – raw materials, maintenance and repair (MRO), and finished goods.
To track your inventory and the location of each material in the supply chain, you can use inventory management software.
Here’s everything you need about inventory management and how to make sure your processes are effective.
The Four Stages
Raw materials include non-perishables such as raw fruit, wool, sand, wood, cereals, veggies, and even meat. These are all used in the production of processed foods.
Goods that are in progress but not yet ready for shipping. Examples include window frames, flour, glass panes.
Finished goods are items that can be sold. These are windows, suits, coats, and loaves of bread.
These are also intermediate products that you sell to manufacturers. These include textile and clothing factories, bread and sandwich shops, as well as consumer goods destined for retail and sold directly to consumers (D2C).
Maintenance, Repair, and Equipment (MRO): items needed for the production line afloat. These include tools, spare parts, and packaging.
The Inventory Model
An inventory is a way a company determines the best way to produce its sellable goods.
Is your company making use of storage-intensive products? Industries include manufacturing, retail, and hospitality. These should all avoid overspending on infrastructure. This is where inventories really help.
Investors’ models have specific techniques that help managers. They determine how much stock they have at their disposal.
Companies with complex production and supply chain processes can use time-to-JIT or material requirements planning (MRP). Other models include Economic Production Quantity (EPQ), Day of Sale Inventory (DSI), and Economic Order Quantities (EOQ).
Latest Trends
Keeping up with the latest trends in inventory management is imperative. Many of these trends focus on helping companies evaluate and invest resources better than others.
Smaller companies tend to track inventories using spreadsheets. Larger companies benefit from the use of specialized software. They also use specialized inventory management applications.
If you have an auto repair shop Tekmetric is probably a good example of a new tech you can use to your advantage.
The AI Revolution
AI and smart tech is helping businesses more efficient. Remember there are open source tools including AI that are free and can help you begin the process of automating.
Automated Guided Vehicles (AGVs) and Automated Mobile Robots ( AMRs ) are the future. They help warehouse operators collect products from pallets and decks. No humans are required. This cuts down on wage costs. It also cuts out insurance coverage for your warehouses as well.
The pandemic has accelerated this growth. Now some companies are now trialing driverless cars, lorries, and drones for rollout in the future.
Machine learning can be used to detect faulty products and packaging so that customers receive high-quality items.
The problem is that much of the data that manufacturers and retailers collect is not structured to fit into spreadsheets. It moves in different SKU formats in the warehouse, where data is produced by all kinds of sensors and scanners.
The ability to track inventory levels in real-time is a game-changing change for companies. The nature of the inventory means that your record is constantly growing and changing. This makes it difficult to analyze accurately and efficiently.
The arrangement of data in a central location simplifies the addition of a new warehouse location or a pop-up fulfillment store. Cloud-based solutions enable decision-makers to access your company’s data and storage from anywhere in the world. All businesses are now truly global.
Data Analysis
Stringent data analysis is needed to see where orders come from. It can also be used to see where inventories are.
Cloud-based inventory management software integrates into your finance, accounting, and order management systems. It enables granular tracking of inventory levels. It also includes SKU barcodes and items in warehouses and on the move.
Scaling your success to bring home the big bucks requires powerful analysis tools. Processes you want to gather data on including planned marketing campaigns, weather, and seasonality to predict customer orders with high accuracy.
Typically, most manufacturers and retailers take a proactive approach by analyzing historical data. This way they can see increases in demand for certain products. This is evident for candy in late October for Halloween or chemicals in May.
They then use humans to work out when there is a spike and when it is likely to return. Once they have enough stock, the design of the fulfillment process minimizes delivery time and contact anxiety.
This depends on your company’s strategic objectives, budget, size, and appetite for technology.
Consider and evaluate each of these trends here. Weighing the costs and benefits of other long-term, medium- and short-term projects will ensure that executives have a clearly defined plan for success. These trends will make sense for your company.
Inventory Management Software: Imperative for Business In the 21st Century
Inventory management software is as imperative for business was as a factory was for 19th-century entrepreneurs. Or as computers and the internet are for the business leaders of the 21st century.
Data analysis is also key to creating an automated process that can help improve productivity.
If you are interested in learning more about inventory management software be sure to check out the rest of our site.
