How do you make sure you get your product to your consumer on time and under budget? How do you know when to produce more product? When do you begin ordering raw materials to make a new product?
All of these are questions each and every individual business must answer in order to stay profitable especially smaller businesses. If your business makes a product in-house, chances are that you rely on a warehouse in your supply chain to store and/or ship your goods. But what does your warehouse have to do with being profitable?
It’s all about management.
Warehousing and inventory management systems help businesses monitor the number of raw materials, finished products, and works-in-progress that the producer has on-hand. These inventory management systems work 24/7 to make sure that each individual business knows the status of their product’s production, from raw material to shipment.
Companies rely on information from inventory management systems to make decisions on production schedules, stock purchases, and warehousing needs. Accurate inventory tracking helps small businesses keep costs low and gives the greatest potential for the highest possible revenue.
How Do Inventory Management and Warehousing Affect My Bottom Line?
Two words: purchasing and cost.
An effective inventory management system helps you decide what to buy, how much to buy, and when to buy it. Inventory management software was designed with business efficiency in mind. An effective inventory management system will help you have product stocked the moment the last of your product leaves a warehouse.
This management process ensures that you don’t overload your warehouse and incur additional costs while also ensuring that you don’t encounter product delivery delays. It’s the full package.
Storing any amount of raw materials or finished products is going to incur a cost to a business. Inventory and warehousing management systems can help control and reduce the cost by calculating the precise amount of materials a business must keep on hand at all times. Some businesses may choose to use something called a lean system.
A lean system is when a business chooses to have a minimum amount of stock on hand to keep the cost of inventory and warehousing relatively low. A company with a lean inventory system only purchases materials or moves product when there is demand from a customer. Lean inventories typically mean that the cost of raw materials, warehousing and inventory management is lower than other systems. However, shipment delays or bouts of high consumer demand can result in late deliveries or lost business for a company that uses a lean inventory system, especially if the business is not getting completely accurate inventory information.
What Happens When Inventory Information is Inaccurate?
When inventory information is inaccurate, you might buy an excessive or insufficient amount of raw materials needed for production or overproduce goods when it is not necessary. When stock levels get low in a warehouse, most businesses would typically send more product. However, with no effective system in place for inventory, some businesses may miss the mark and incur unnecessary warehousing costs.
Businesses may utilize user data and the amount of time it takes to receive replenishment stock to assist in setting the inventory level. Having a consistent and steady inventory level is essential for consumer happiness and high revenues. Insufficient stock means failing to meet customer demand. This can result in late shipments and lost revenue, something no business owner wants to hear. Purchasing excessive or insufficient inventory means higher warehousing costs per unit, possible overage fees, and a chance of unhappy customers.
Other Benefits of Inventory Management
Inventory management allows you to track and maintain several other aspects of your supply chain as well.
You can account for damage and losses with good inventory and warehouse management systems. Once you identify damage, inventory management helps you label that item as unusable and removes it from further integration into the supply chain. Your inventory also can have different values depending on when you ordered them, so your tracking can tell you exactly how much you paid for each unit and how much you need to track as a loss. This is important because your inventory losses count as a business expense.
Quality control is always a top priority for any business. Warehouse management systems provide you with an extra opportunity for inspection upon shipment delivery. Inventory personnel can examine the shipment for damage and make sure it contains all items ordered. Once the stock is stored, you should be able to access it easily to look for damage and to check expiration dates, if applicable.
Effective warehouse and inventory management systems allow businesses to more readily comply with regulations while also trying to meet consumer demands and remain competitive. This is realized through real-time recording and tracking of data, better business intelligence, and solutions that automate business processes.
Why Choose Ranger3PL?
At Ranger3PL, we have top-of-the-line inventory management techniques that protect your bottom line. Our Just-in-time (JIT) delivery allows us to keep your lowest possible levels of inventory while still consistently meeting your customer demand. At Ranger3PL, we maintain the right quantity at the right time with the right quality.
We offer inventory management as part of our full-service warehousing service and can exceed the needs of your business with a custom-tailored logistics solution.
With our depth of experience and industry expertise, Ranger3PL has earned a reputation for quality service with customers in a variety of industries including retail, transportation, government & nonprofit, food & beverage, industrial goods, consumer goods, paper & packaging, healthcare, energy & infrastructure, and technology.
Contact us today to see how we can help with your inventory management.