Everyone is aware of supply chain issues that continue to plague manufacturers, shippers, and retailers globally. While some of those bottlenecks and delivery delays are outside of our control, businesses must concentrate on how to better manage those things they can control, namely inventory management. In the perfect world, shippers have the correct product, at the perfect quantity and the perfect time. Inventory moves throughout the enterprise system seamlessly, and as inventory flows, so does cash. Unfortunately, just-in-time inventory planning is great in theory, but in the current business environment may be a bit unrealistic.
With supply chain issues, late deliveries, and worsening labor problems, how can a business improve its inventory management to reflect an improved cash flow and a healthier bottom line? Small fixes can sometimes offer a significant impact.
Purchase Smartly
Whether purchasing raw materials for manufacturing, or finished goods ready for sale—having the right amount of inventory at the right time is essential. No one has a window into the future, but most have historical data, knowledge of suppliers, and a good understanding of their industry. With these insights, a business can track seasonal trends, suppliers’ reliability, and the general direction an industry is heading.
With all the transportation issues, if logistics people are able to source locally, an operation will not only save money in shipping costs, but will also be more likely to have the product on time. That is if the shipping distances are shorter.
Letting vendors know lead time requirements up front allows them to commit to your schedules. Another tactic that manufacturers, distributors and retail operations can do is to expand the vendor pool. While making up inventory gaps, this approach can also foster healthy competition.
Versatility in Storage Is Essential
Warehouse space is valuable. No one has room to store slow-moving or obsolete inventory. If business is seasonal, or a product relies on rotation because of shelf life issues, an operation needs to have the ability to store and ship product quickly and safely, and be able to store shipping supplies without using valuable space needed for finished product.
Reusable products, such as plastic pallets, can be used to transport products as well as store them in a warehouse operation. Unlike wooden pallets, these pallets can support weight, are easy to clean, and some are nestable, allowing for a reduction in the space needed to store them.
Using reusable, nestable postal-type totes is another way to conserve storage space. These totes are easy to carry, are nestable, and durable enough for repeated use. A business can customize them and color code them to make the totes easy to identify. Using reusable containers is a great way to save money in manufacturing and shipping as well, and an operation is helping keep the planet just that much greener.
Invest in Software
An investment in an upgraded software system can help a logistics team see trends, pitfalls, and vendor shortcomings that it may have missed in the past. Using technology to help with inventory management may point out when it is better to order smaller quantities, even without a price break, because of the savings in inventory dollars and increase in cash flow. It may be able to find the inventory sweet spot of not too much, not too little with the use of artificial intelligence used in software systems.
Forecasting is an area that can either over or under-stock a company. An inventory software system can increase cash flow in a fraction of the time that it takes an inventory manager to crunch the numbers. And it will automatically adjust to reflect the current cost of goods as purchase orders and receipts are processed. Slow-moving, out of date, and obsolete products are also more easily identified. An investment in a new or upgraded inventory software system will pay for itself in no time with the added insights and value data that will become available.
Flexcon Can Help With Your Material Handling Needs
If a business is looking for reusable pallets, nestable postal totes, or any other end-to-end container solution, Flexcon can help. Our containers are optimal for shipping, warehousing, and manufacturing needs. We serve most industries, including agriculture, electronics, automotive, and more. Call our experts or go to our parent company website, Flexcon for help with customizing the containers, which will help increase cash flow today.