How To Overcome Inventory Management Challenges
- Common Inventory Management Challenges
- Inventory Optimisation Solution
- First Steps to Implementing EazyStock
The accurate monitoring of inventory levels should be a core business practice for any small- to medium-sized business (SMB). Inventory management best practice is key to deliver efficiency and to effectively maintain a competitive position in the marketplace. While most SMBs have an ERP that includes some inventory management capabilities, ERPs don’t usually solve inventory management challenges at the deepest level. However, it’s now possible for businesses to invest in an ERP add-on that allows them to move away from time and labour-intensive traditional methods and move towards effective, automated inventory optimisation.
Today’s multi-channel marketplace compounds this issue. The need to get the right product to the right place within a strict deadline is critical to the success of a business, due to heightened customer expectations. Inventory optimisation processes are becoming a critical requirement due to increases in customer demand, expanding product portfolios and lengthening supply chains. Effective inventory management is the best way for organisations to free up capital, boost service levels and free up time for employees to focus on value-adding tasks.
Common Inventory Management Challenges
SMBs have the daunting task of watching out for unique inventory management challenges within their supply chain that are caused by poor inventory management. There is more to inventory management than just keeping track of what enters and exits your business. These inventory management challenges can easily be prevented and transformed into opportunities. The right software will allow for improvements in efficiency, revenue growth and help your business achieve its objectives.
Here are 6 common inventory management challenges that need to be identified to effectively optimise your inventory.
1. Low Product Turnover
Failure to track demand can lead to a lower than expected product turnover due to low demand. Low turnover results in excess inventory that ends up wasting space in your warehouse and tying up capital, which is costly for business.
2. Excess Inventory
Excess inventory occurs when a business inaccurately orders inventory and is left with more than needed. This leads to storage problems and prevents you from offering better products that could lead to higher revenue.
3. Failure to Keep Track of Stock
Infrequent inventory checks and using manual processes to track inventory is not enough to manage your supply chain. Failing to keep close track of stock movement in and out of your business causes accounting errors, resulting in added costs for your business.
4. Poor Service Levels
A company’s number one goal should be supporting the highest possible service levels for customers. Improved service levels lead to higher profits; customer satisfaction is the most important asset a business can have, and poor service levels will negatively impact customer perception of your brand. However, delivery and lead times will vary depending on the product which makes management complicated for businesses without inventory optimisation software.
5. Difficulty identifying demand patterns
Changing demand can be one of the biggest challenges for SMBs, especially with ever-increasing and changing product portfolios. For example, within the electronic industry, there are shorter product life cycles and high demand which increases uncertainty. Tracking and analysing demand changes and trends help companies accurately forecast for future orders.
6. Lack of Visibility
The complexity of the supply chain network has increased with globalisation; accurate inventory has become a critical factor for success. Having complete viability and insight into your inventory from supplier to customer is essential to effectively managing a global supply chain network.
Inventory Optimisation Solution
As you can see, your business will regularly experience complex challenges when it comes to managing your inventory. To save your business both time and money, consider implementing software solutions, such as EazyStock, that have the right tools to help you succeed. With EazyStock, your business will see a decrease in inventory up to 50%, freeing up capital to be used in other areas of your business – such as your future development and growth. You will also see service levels rise up to 99%, which will mean happier clients and higher customer retention.
With our cloud-based ERP add-on, the demand trends of all your SKUs are updated daily; based on these trends and your measured key performance indicators, the software will automatically recommend optimal orders, helping your business because more versatile. By integrating stock management, demand planning (measured by our 9 different demand types), and operational management your ensure that your business becomes adaptable and profitable.
First Steps to Implementing EazyStock
It is quick, easy and cost-effective to get started with EazyStock; our cloud-based software integrates directly with your existing ERP, removing the need for sizeable up-front costs and instead moving the focus towards our customers quickly benefiting from our software.
Not sure if EazyStock is the right fit for your business? Diagnose your supply chain with our free inventory health analysis to take the first steps towards enhancing your current inventory management system.