The world’s most efficient wholesale distributors utilize cloud-based software to help them manage their inventory. Without it, your business will likely not survive in this highly competitive market.
Today’s B2B buyers want the consumer experience. If your technology can’t support that or real-time inventory tracking, you can’t provide the level of customer support and experience that will keep buyers returning again and again.
Combine great products with a great buying experience and you’ve got the winning formula. Sounds easy, right? Not so much. But there’s no need to feel overwhelmed.
You can start managing your inventory by implementing a few practices and always add more to your list after you master the basics.
As your business grows, you’ll need to add more inventory management practices & inventory KPI tracking, but once you do—it’s likely that you’ll wonder how your company operated without them. Not only are strong inventory management systems likely to increase customer satisfaction, they can also improve employee satisfaction.
If your employees are happy in their jobs, which can be partially achieved through inventory management models that make them more efficient, that too can have far-reaching positive effects on your bottom line and decrease turnover.
7 Types of Inventory Management Systems
1. Use Cloud-based Inventory Management Software
Using cloud-based inventory management software is the foundation needed to build a highly-efficient wholesale distribution business. Use software that is purpose designed for inventory management, otherwise you’ll end up frustrated with what you chose or a lack of software adoption among the employees that should be using it. While it might be tempting to manage inventory counts in an Excel spreadsheet, that method will cause you more harm than good in the long run. It’s also impossible to keep it updated in real time for employees and customers. And yes—today’s customers expect to see what you have in stock online.
2. Perform Random Pick, Pack and Ship Checks
To ensure that your teams are using the process you have in place and that human error isn’t a factor, you can perform random checks on shipments that have been picked and packed. Be sure to explain that this isn’t a witch hunt, but rather a means to ensure that the proper procedures are being followed for the sake of accuracy. If you do find an error, you might find a breakdown in your warehouse, such as improperly labeled items. In fact, it’s a great idea to check and follow an order from placement to fulfillment to ensure your workflows are working as designed.
3. Use Demand Forecasting to Increase Inventory Turns
This principle requires a look at your prior year sales data, which can help you predict how future sales will net out. Demand forecasting combines your forthcoming forecasted sales and how similar products performed in the prior year. There may be products that are only in demand seasonally. These should be stocked shortly before the uptick in activity occurs. This way, you’re not caught off guard with a large number of orders before you are ready. For fast-moving products that are always in demand, be sure to stock a sufficient quantity to keep those products flowing in and out of your warehouse.
4. Use Drop Shipping as You Grow
Until you have the cash flow and a warehouse, utilizing drop shipping from your suppliers is a great way to grow sales until you’re ready to stock those items. Drop shipping does typically include a service fee from the vendors that you are buying from, but it does also ensure that you’ll always be able to deliver on time, every time. Drop shipping, therefore, is a great way to grow your brand and business while leaving the logistics to someone else.
5. Optimize the Receipt of Goods from Suppliers
Once goods are received from your suppliers, be sure to count the inventory received against what was ordered. Scan the products and barcodes and apply the right labeling immediately so you can get those items restocked and out the door. If you are allowing receivables to sit for days at a time in your warehouse, you’re losing sales by the day. It’s imperative that receiving take place quickly while ensuring accuracy of the shipment.
6. Use Training and Safety as an Advantage
An employee accident can bring your warehouse operations to a halt. Instead, be sure to train employees regularly on warehouse safety. Because slips, trips and falls can be the most common injuries, be sure to evaluate your flooring and require safety-toed footwear if your employees are lifting or are near heavy items or equipment. Employees operating heavy equipment should be properly licensed and always in high alert when employees are walking through the warehouse.
7. Listen to Your Customers and Employees
Your customers and your employees are a great source of feedback. While you don’t need to implement every request at any given moment, it is a good idea to keep a list of improvements suggested by customers and employees. Both parties are your closest allies and if you ignore repeated requests or suggestions, you might be missing out on improvements that can have a positive impact not only on how successful your inventory management program is but your profitability. Also, by telling your customers and employees that their feedback matters, both parties are likely to be more loyal since they’ll feel like the relationship is more of a partnership.
Ready to Use a Inventory Management System to Grow Your Small Business?
Systum is the only software platform you need to succeed and win repeat customers as wholesale distributor. From customers to employees, allow everyone to view and access real-time inventory levels. If you’d like to learn more about how Systum can help you track inventory in real time, fill out the form below.