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Inventory Management: Challenges and Tips

woman taking inventory in warehouse

If it seems like you’re constantly dealing with inventory management challenges, you’re not alone. It’s common to have trouble managing inventory, especially in this economy with supply chain disruptions, wild demand fluctuations, and more things that play with your balance sheet. But it’s vital to get inventory management right. Even small snafus can have a large effect on your margins.

The good news is, those challenges have solutions. The right inventory management system, like what’s offered in NetSuite, can help solve those problems.

Here are some of the most common inventory management challenges we see, and tips for fixing them.

Challenge: Incorrect or short supplier shipments

Supplier errors happen all the time. It’s just a fact of business. Everyone has had the experience of getting a shipment and finding it short. Unpredictable lead times don’t help matters, either.

Tips for improvement

Constantly monitoring supplier performance and accuracy is vital to your bottom line. Vendor management functions within your inventory management technology can track what you’re supposed to get and when you’re supposed to get it, keeping your counts current and accurate.

Challenge: Poor supply chain visibility and responsiveness

You may have the stock in your warehouse to meet your customers’ needs. But finding it quickly when you need it is the key to efficient warehouse operations. If your inventory is hard to locate, it can lead to a lag in your response time, delayed shipments, backorders and ultimately, unhappy customers. All of that can add up to a big hit to your brand, especially if it happens regularly. You’ll be seen as a company that doesn’t deliver.

Tips for improvement

The right inventory management platform can shine a light on your inventory, making your supply more visible and quickly accessible. You’ll be able to locate just what your customer needs, when they need it, with near perfect accuracy. With NetSuite, you can even update your inventory database with images and detailed product descriptions, which will up your accuracy and prevent the misplacement of product in your warehouse.

Challenge: Disconnected systems

If you’re working with different systems, it could be that your data is not connected in real time. Couple that with the fact that most small businesses track inventory manually or not at all, and you’re looking at inefficient warehouse operations, which can lead to real problems fulfilling your customers’ demands.

Tips for improvement

Tracking software, like NetSuite, solves this challenge seamlessly. All of your data is in one place, and you can even set it up with automated features for re-stocking and procurement. The right inventory management system will provide you with a centralized database that has real-time backup, automatic restock and inventory updates. And best of all, it’s on the cloud.

Challenge: Lack of demand planning

Planning for customer demand has always been difficult, but now, in this economy when everything seems to be changing constantly, it’s nearly impossible. Too much inventory will just sit unused, taking up warehouse space and perhaps becoming obsolete in the process. Not enough stock leads to shipping delays and unhappy customers and ultimately lost sales. The right balance between too much and not enough is difficult to find.

Tips for improvement

Here’s where the power of your ERP can really shine. Taking the human element out of demand planning, or minimizing it, allows you to use the power of your technology to ramp your demand planning up several levels. Your ERP can factor in data from all departments, especially historical data from your accounting and sales divisions, to predict upcoming demand based on past performance, ever-changing customer preferences and current seasonal trends.

If you’re experiencing problems and challenges with inventory management, it is time to consider upgrading your business systems. At Green Business Systems, we’re here to help with that. Leveraging Oracle NetSuite, GBS has helped product-based companies gain better visibility and insight into their business, increase efficiencies for demand planning, and help manage and track inventory in multiple locations.

To find out how we can help you put the power of NetSuite to work for your business, contact us today.