Efficient management of inventory for wholesale distributors often involves a range of different metrics and processes depending upon the market niche but five core principles remain universal. Here are five ways to make sure your large wholesale distribution firm is pursuing an optimal strategy when it comes to inventory management:
5. Incorporate Technology Into Core Processes
When it comes to core processes, or those that are essential to the logistics behind your operation, you should seek out the best technology you can find. Look at what the competition is doing and benchmark their infrastructure or mirror those of a larger company. You don’t necessarily want cutting-edge tech so much as what the industry considers the best. Of course, there will probably not be total consensus on all aspects, but you will find the best options and can conduct your own research from there.
4. Onboard Team Members
Implementing change or seeking to improve upon a company’s logistical infrastructure often fails because of one major key element: Lack of employee participation in or even knowledge of the project. Onboard team members before introducing something new and provide support after. You can even solicit their feedback before, during, and after the process. The point is that you want to implement change that your employees can take ownership over. Top-down dictates rarely work because employees feel like they are having a situation imposed upon them rather than actively being part of a solution.
3. Automate Where Possible
Work to find areas where you can automate processes. Outline the pros and cons of doing such a thing and look for ways to harmonize the two. Again, you need both employee buy-in and their expertise, and automation can often set interests at cross purposes. Demonstrate how this will make everyone’s life easier and, instead of replacing labor, automation allows for your company to do more.
2. Maintain Low On-Hand Inventory Levels
Because of the time element involved in maintaining inventory, you need to try to maintain as low or as optimal a level as possible. Not only does this limit your financial exposure but it also helps you better prepare for times of high demand because your optimal capital preservation strategy has left you ready to up inventory levels as needed.
1. Track Dates
Whether you work with a product that has a definite shelf-life or not, you need to keep track of dates on your inventory. Not only does this give you some idea of the ups-and-downs in demand for certain products but also it can help you avoid losing inventory to spoilage. The more accurate the data you have on hand, the better your future business decisions will be. Nothing is quite as actionable as the timely movement of inventory and identifying periods of increased activity as well as those without much going on at all. In the end, all of this is about efficient capital utilization and preservation to enable your firm to take advantage of times when there is high demand and survive in times of low demand.