The inventory control of products is a cornerstone to the success and operational efficiency of any business. The ability to properly manage stored products prevents economic losses and improves customer satisfaction by ensuring that they are available when needed.
However, achieving this can be a challenge; therefore, in this article, we will provide you with 10 practical strategies to optimize inventory control of products and transform the way your business manages it.
Having an inventory helps to keep merchandise details in order and to improve the supply of raw materials needed to meet product demand. Inventory control is necessary to keep track of stock and make strategic decisions.
Product inventory control is of great importance in the logistics process, as it helps to maintain the correct balance of what is in the warehouse. Its objective is to avoid losing a sale because there is not enough inventory for an order or to meet the demand of the end consumer.
If there are frequent shortages, it is very likely that customers will look for other alternatives with other suppliers and stores, resulting in consumer losses. Therefore, it is important to have optimal management to close sales.
On the other hand, maintaining optimal inventory levels frees up cash flow, which is crucial to the company's financial health.
This offers multiple key benefits, such as:
Let's look at some proven and efficient tips for product inventory control:
It is essential to integrate inventory control with the areas of purchasing, distribution and production. This ensures for raw materials, materials, products in process, finished products and spare parts to be properly managed, aligning them with the demand plan and the purchasing plan.
A correct warehouse layout and accurate inbound and outbound control are essential to meet business requirements.
Have a commercial forecast model to help you align market demand with supply chain planning. A well-designed S&OP (Sales & Operations Planning) model improves assertiveness between demand and production, increasing the level of service to the end customer.
In addition, establishing clear delivery agreements between areas ensures that activities within the supply chain are completed on time.
Designing a sourcing model for product inventory control optimizes inventory composition and maximizes productivity through an efficient replenishment model.
Also, an effective purchasing plan model allows negotiating with suppliers to align quality parameters, service level, price and payment terms.
On the other hand, we recommend implementing a mobile statistical replenishment model, including safety inventory, maximum and minimum inventory, expected demand, standard deviation, lead time and optimal purchase lots.
Weekly planning of warehouse operations and standardization of the receiving model with quality policies are vital for good product inventory control. Claims management and operational synchronization, including unloading schedules and pallet availability, ensure efficient product receiving.
Reviewing and adjusting the composition of the warehouse layout optimizes picking transfer time. Improving product location by parameterizing the system and analyzing product volumetrics, space and required characteristics facilitates efficient storage.
Similarly, considering the storage infrastructure, such as rack type and load capacity, is essential for product inventory management.
Reinforcing inbound and outbound processes and strengthening FIFO (First In, First Out) and FEFO (First Expired, First Out) rotation policies are essential measures for this control.
It is also important to conduct area audits and follow good storage practices, along with location audits, to ensure inventory quality.
Implementing cyclical inventory procedures according to A, B and C product classification ensures tight control. FIFO and FEFO rotation policies, area audits and good storage practices are fundamental to efficient inventory management.
Increasing productivity in the receiving, staging, fulfillment, shipping and delivery processes is essential in product inventory control.
You must set reasonable performance expectations and design flexible capabilities through an activity allocation model to improve efficiency.
Similarly, reviewing resource scheduling according to the process and expected workloads also helps to increase productivity.
Having the 5 S's methodology (classification, organization, hygiene, discipline and cleanliness) significantly improves the work environment and operational efficiency. Training and audits based on this methodology ensure its correct application.
Designing typical supervision days with a clear sequence of activities for the supervisor promotes an active and effective supervision.
Finally, defining and implementing a pyramid of indicators to track daily, weekly and monthly results allows for continuous control and constant improvement.
Product inventory control is a critical activity that directly impacts a company's operational efficiency, customer satisfaction and profitability.
At London Consulting Group we offer comprehensive and advanced solutions to optimize inventory management, addressing every key aspect to ensure effective and accurate control.
Through the analysis of inventory movement (consumption) versus inventory cost, we help manage inventory coverage and composition optimally. We design specific tools to calculate orders, using algorithms and parameters such as minimum, maximum, reorder point, replenishment time and variability in supplier deliveries.
Contact us to transform your company's inventory management.