Over that past few months, COVID-19 has affected almost all the industries to a greater extent, and countries are responding in different ways. Due to this, the demand and supply in inventory have been fluctuating very much. As the lockdown measures are eased and re-imposed from time to time, it’s expected that the orders for specific items will rise and fall time and again… Therefore, having a more robust and feature-rich inventory management software in place is more important than ever.
Here are several ways that you can do inventory optimization:
Maintain inventory accuracy
Inventory is not something that you can just set once and forget about it. It needs checks at regular intervals to make sure that the merchandise is in the proper required amount. Since buyer tendencies keep changing, you should schedule an inspection once every month to keep everything in control. You can easily get overwhelmed and feel out of control if all the boxes are not ticked.
The better way to keep check of your inventory is to schedule the inventory check hours outside the working hours so that the stock won’t be in flux. Do Everything like the warehouses where inventories have been stored and the stocked materials are checked in advance so that you don’t waste any time. Also, give your staff proper training to do inventory and make sure that they do it right. Once the manual tally is done, you can put the numbers in the inventory system and cross-check it. This way, you will always remain ahead of the twists and turns in these uncertain times.
Forecast demands in advance
Buying pattern of the customers are very unpredictable; therefore producing an accurate forecast for the demand is one of the most challenging tasks for the inventory teams. The planners should continuously watch the specific demand trends for which the customer requirement is high. Managers trying to figure out the demand forecast manually will face tough challenges as the demands are continuously changing.
It is almost impossible to predict future demands in these changing times; so it is wise to use quantitative data and human insights obtained from surveys done. Using poor inventory software to gather reports about forecasts can result in stock-outs or overstock, inefficient utilization of resources, inaccurate rushed orders, and many other things. Since things like these are harmful to the business and can result in loss of money, it is essential to find an excellent digital inventory software.
Make sure to invest in the right inventory
In the current situation where the money is tight in nearly every industry, invest in a stock that just doesn’t sit in your warehouses for too long. Having a detailed understanding of your inventory can help you avoid this.
ABC inventory analysis is a method that most companies use to categorize inventory based on each item’s value to the business. As per the principle, 80% of the sales come from only 20% of the stock; therefore, it is crucial to identify those items and set inventory policies to ensure their continuous supply. But due to the current pandemic situation, the customer demand changes at a more rapid and variable rate than ever. So this is of most significant importance to find the right balance using the inventory software between the stock that makes most sales and other items.
What customers buy is not necessarily what they want
Often we see a high demand for typically slow-moving products; the reason for this is the customers are buying those items because their preferred items are not available. Using the inventory system, a close watch should be kept on the items the customer views in their visit and then keep those items in proper stock to assure ultimate customer satisfaction.
You can also allow your suppliers to suggest a temporary supplier that can provide the customer with the item they are looking for in case it is unavailable with the seller.
Improve relationship with your supplier
It is now time that you build a better human relationship with your suppliers and those you supply to, as you will get to know the difficulties they experience and how it can affect your business. Also, as long as the current situation of COVID-19 exists, it will help you find the other possible options for your existing suppliers in case they are not able to fulfill your demands for critical goods. Strengthening the relationships with both sides of the business will help you negotiate the supply contracts better.
If demands for some of the goods seem to be declining, then merely reducing the order is an effective way to reduce the inventory and storage costs. Closely monitor the inventory system and notice which products are moving less and which has higher demand so that you can make better decisions that can sustain your business.
As COVID-19 is disrupting supply chains for vital industries around the world, leaders and inventory management teams must take spontaneous decisions to sustain the critical business operations. Making sure to address the crises in the short term based on reliable reports makes inventory planning more resilient.