Inventory Management is an area of Business Administration that aims to organize and control the flow of goods over a given time in a space called a warehouse. It has resources that allow forecasting demands and thus determining product supplies in the right measure and at the most appropriate time.
In the context of a warehouse, both a shortage and an excess of products can generate costs or losses for a company like yours, whether it's an online store, a physical store, or a unified business . Indeed, Inventory Management aims to ensure that neither of these situations occurs. In other words, it aims for a balance between the Purchasing, Sales, Inventory, and Delivery departments.
Therefore, the stock manager must decide every day what to supply, in what quantity and at what time. This requires the use of logistics management software, some of which we will cover later in this article. Keep reading and stay in the loop!
STATE OF INVENTORY MANAGEMENT: STATISTICS
One of the biggest problems regarding warehouse management is poor inventory visibility, as this prevents your company from meeting customer expectations. To give you an idea, according to the E-Commerce Fulfilment Report (2017) by Peoplevox, 63% of companies admit they don't always ship a product on time. And of these, 34% have already made late shipments because they sold a product that was out of stock.
But it's not just stock shortages, also called stockouts , that poor visibility can cause. It also causes excess inventory in some cases. In any case, good inventory management can reduce both shortages and excess inventory and, consequently, decrease your overall storage costs by up to 10%, according to the Retail Vision Study (2017) by Zebra Technologies.
It is also worth mentioning that most companies do not track stock. In effect, your operations are more prone to errors, generating predictability problems. This, without a doubt, is a big cause of stock outs and/or excess stock, situations that cause damage to your company.
HOW TO OPTIMIZE?
To optimize both the logistics and the Inventory Management of your e-commerce company, it is important to invest in some software. The Warehouse Management System (WMS), for example, makes it possible to distribute, organize and control products in stock, which is essential for good management.
Meanwhile, the Order Management System (OMS) provides an overview of the warehouse. It makes it possible to manage returns and guide logistics flows. Furthermore, a good OMS, such as VTEX OMS , synchronizes data from multiple inventories and creates an omnichannel commerce experience.
Since I mentioned VTEX, I'll also mention VTEX Tracking . With this system, you can route, track, and communicate the progress of deliveries to your online store's customers in real time. It especially facilitates last-mile logistics.
Enterprise Resource Planning (ERP) allows you to monitor the movement of products in the warehouse. A good ERP makes it possible to know the exact amount of each product, essential information both for negotiating with suppliers and for carrying out settlement campaigns.
Another important software is Supplier Relationship Management (SRM), with which supplier relationship management is carried out. With this system you will be able to evaluate, certify and approve suppliers, among other actions that will improve your Inventory Management.
Finally, for a good Inventory Management, also invest in stock replacement models such as Just in Time; and in inventory movement models such as PEPS and UEPS, for example, among other features. Make your way!
As soon as you can, click on “ Manual Picking ” and discover features like pick by light, put to light, voice picking, and radio frequency terminals to equip your warehouse!
