For businesses dealing with the operation of large amounts of products being manufactured, stored and sent to customers at any given time, inventory represents a unique issue in ensuring that you stay at the most efficient status possible. Knowing what inventory is currently selling, as well as how much is being made and the amount you currently have in storage are all parts of having an inventory outlook that will work best for your business. No matter the types of goods you’re stocking and shipping, keeping a lean inventory will mean less overhead and more profits at the end of the day.
When examining the bottom line, however, you’ll see that there are so many variables to quality inventory management that it can become overwhelming. For every item your company is producing, shipping and storing, you need to stay on top of how many there are, and where they are. With the closest possible watch on the products you create, you’ll be able to identify trends in your inventory and gain the insight you need to continue to adjust trends in the future to maximize output and minimize waste. This is where inventory management and warehousing come in.
Inventory management is a system that is primarily concerned with keeping track of the entire inventory of a company while that company owns it. This includes items that are sitting on shelves, sitting in warehouses and in transit. Once an item is sold, it no longer belongs to the company and becomes listed as revenue instead of inventory.
Inventory management is necessary for businesses because it allows them to keep track of the items that are being sold and required the most, as well as the items that aren’t selling as well. By analyzing how many units of a specific product are on hand, inventory management allows a company to make a better-informed decision of what products they need to manufacture more of and which they need to slow production on or even discontinue.
Inventory Management Systems
Inventory management systems are, simply put, the method by which a company tracks inventory management data. Originally, inventory data was collected by pen and paper on physical spreadsheets. When technology became more common within the space, many companies switched to digital spreadsheets and methods of communicating quicker and more efficiently about inventory.
Today, however, the smartest way to manage inventory is through the use of specialized software management that’s able to automatically keep track of inventory and include features like automated ordering. Inventory for even a midsize company is too large and complex to leave up to potential errors, so finding a partner able to utilize updated and emerging technology will keep your inventory management practices ahead of the curve and ahead of the competition.
Warehousing is similar to inventory management in that it deals with the inventory a company is trusting to a warehousing division or partner, but warehousing is a more comprehensive system focusing on the total picture within a range of warehousing facilities. A warehouse management system includes the inventory management system being used by an organization, but inventory management is just one process within the system while warehouse management has to include more elements of the supply, inventory and warehousing system.
Warehousing includes shipping and receiving of items from warehousing facilities, how items are arranged in a layout within a specific warehouse, and the way workers fit within the schedule of operations for a warehouse. For example, inventory management will tell a company how many units are selling and moving, and how fast, so that they can make an informed decision over further manufacturing. Warehousing is a closer look at the process that encompasses how the items work within the system of the warehouse. For example, items that have a high turnover rate within the warehouse will be placed in the most convenient location near loading and shipping docks to minimize time waste, and regular reporting tools will help a warehousing partner identify areas where they can improve efficiency.
With companies commonly having up to 90% of their inventory as stationary at any one time as opposed to in transit to a storage facility or to the consumer, keeping an eye on this through proper inventory management and warehousing practices will pay dividends in the end. As a team of experts and professionals delivering efficiency and results, Ranger3PL can be the partner you need to take your business to the next level. Contact us today, and see how we can evolve your inventory system.