The movement of materials and goods throughout the entire supply chain comprises your entire inventory. It includes ordering, storing, and stocking the finished products, and supplying them to your customers. It also involves the use of materials in the production process.
Your business needs to keep an accurate inventory Tracking of raw materials, unfinished products, finished products, goods in transit, cycle inventory, anticipation inventory, decoupling inventory, buffer inventory, and maintenance, repair, and operating (MRO) goods inventory.
One of the most efficient ways to successfully track all of these inventories is by implementing a warehouse management system (WMS). However, avoid going for legacy systems that may not offer you modern inventory tracking capabilities.
An advanced WMS needs to have radio-frequency identification (RFID) technology and a serial number for every item within your supply chain. You can identify this RFID wirelessly through appropriate sensors and readers.
Therefore, as you think of implementing WMS software in your business, identify a reputable RFID implementation services company to develop a tailored system for you.
Here are six steps you should follow to know how you can implement a successful inventory tracking strategy.
1. Audit Your Inventory Gaps
Perhaps this has never clicked in your mind before. But a good starting point is to identify some of the gaps you’ve experienced in your inventory management. Foremost, note instances when your inventory wasn’t syncing with your demand. Maybe it was excess or a shortage.
It might be difficult for some businesses to note such scenarios because the culture always produces products in advance, stores them in their warehouse, and waits for orders. However, this might not be the best practice as it can lead to losses if your products get spoiled while in the warehouse. In addition, it might hold your capital.
To solve this problem, you would benefit from having excellent software that connects you to your clients. Your clients need to order through the system and give you a timeline when manufacturing should be completed.
As a result, your production will always be aligned with the demand. Having done that, you’ll avoid any losses that may be attributed to overproduction.
2. Study Consumer And Demand Trends
From your business statistics, study the trends over the years. Identify periods where the demand for your products peaked and when it dropped significantly.
Demand could be affected by the seasons. When you know the expected trend among your customers, you can use the statistics for forecasting every season.
When you’re entering an expected peak period, you should prepare to make a higher requisition of raw materials. This may affect labor and storage space in the warehouse. Thus, you can always make the necessary adjustments depending on the expected behavior.
3. Automate Processes Where Possible
Automation will help improve productivity and efficiency. With technology offering solutions for nearly every process, identify your inventory processes that need to be automated.
Some of the inventory tracking processes that you can consider automating are: automated reordering, unit reporting of multiple locations, processing store orders, tracking stock transfer records, and goods dispatch notifications. Efficient automation significantly lowers human error.
4. Sort Your Inventory
Categorize your inventory tracking into different layers that you can use to cater to different demand periods. You may choose to have clusters according to customer type, product profit margin, or production costs. Such categories will help deliver on certain demands and lower the associated costs. With modern inventory software, you can easily run this practice.
5. Analyze The Performance Of Suppliers
Your supplier can either derail your performance or boost it. A supplier who’s always late in delivering your requisition may cause production hitches. If you’ve got one of those kinds, it might be high time to switch to a reliable supplier.
On the other hand, if they can improve on delivering their materials, the better. Besides, you don’t have to risk your efficiency in your supply chain if there are no changes after talking with them.
6. Use Technology That Can Be Integrated
Inventory management software isn’t the only technology that you’ll need. You’ll also need point-of-sale (POS) systems and mobile scanners to track your inventory efficiently. In that light, you need to ensure that you have an inventory tracking management system you can integrate with other systems to facilitate seamless data transfer from one system to another.
The performance of your business can be accurately accounted for when you have a good inventory tracking structure in place. As a result, you need to do a proper audit of your inventory mechanisms to improve where necessary.
In addition, you should automate your processes for better performance. In summary, this article is a masterpiece of the necessary steps to follow to achieve successful inventory tracking.