Today, manufacturing and logistics businesses are facing unprecedented opportunities for growth. Connectivity and globalisation have made the entire world your potential market. And as the pace of change accelerates, new technologies provide compelling new capabilities to improve your business’ performance and increase customer satisfaction. One such way you can take your business to the next level is to implement industry-leading best practices for inventory management in your manufacturing and logistics company.
Without a modern solution, manufacturing and logistics businesses struggle with the same challenges, most of which stem from unreliable and scattered data. The results include poor visibility of orders and inventory, and inefficient order processes, riddled with inaccuracies. What’s more, if your processes are heavily manual, then you might find that this is creating roadblocks to your expansion into new channels or markets.
If any of this sounds familiar, it’s worth taking a look at some of the best practices for inventory management that will allow you to overcome these growth-stopping challenges.
But first, let’s clarify the process of inventory management.
What is inventory management?
Effective inventory management refers to the tools and processes used to identify and track all your stock from purchase through to sale of goods. This should provide you with insight into how much stock to order and at what time so you always have enough product on-hand to fulfil customer orders. Additionally, your system should provide you with advanced warning if replenishment is needed earlier than expected. The features of an effective inventory management system include:
- Bin and lot management
- Landed cost
- Demand-based replenishment
- Customer and volume metrics
- Pricing
- Multi-location inventory
With this in mind, here are four best practices for inventory management in manufacturing and logistics companies.
1. Integrate inventory with fulfilment and shipping
Having detailed inventory management functionality like the above helps keep track of the areas where you can tighten control of stock levels while increasing operational efficiencies to ultimately reduce inventory costs. But these capabilities can add even more value when integrated with fulfilment and shipping. With the integration of all of these processes, you can eliminate manual re-entry, order processing errors and the exorbitant costs of reconciling shipping information to further drive efficiencies.
2. Operate at speed, with full visibility
True efficiency gains begin with a single view of customers, orders, items and inventory. From our experience working with customers in the manufacturing and logistics industry, we know just how difficult it is to manage your orders and inventory without complete visibility.
Migrating your business to a real-time, cloud-first platform that keeps all channels operating from a unified base is critical to overcoming this. It requires implementing a centralised order management solution that stores all information across your processes, from orders and sourcing to payments, fulfillment and sales operations channels. It is equally essential to ensure that all fulfilment channels have access to the critical information, enabling you to allocate inventory based on stock levels, demand requirements and timing.
With a unified foundation in place, you will be better positioned to add additional eCommerce and sales channels, as well as identify and rectify supply chain inefficiencies. From there, you can deploy further strategies such as pricing and margin management or transforming business intelligence into demand, supply, costs and fulfilment trends.
To see what modern visibility looks like in action, read the story of Annexa customer, Tomoana Warehousing.
3. Add automation to inventory management
Connecting and integrating your business systems in the cloud also delivers the framework you need to start automating tasks that will streamline processes and increase employee productivity. This, in turn, improves the operational output and frees up employee time to focus on optimising your business rather than performing manual tasks. A unified system also offers scope to automate the end-to-end order and inventory lifecycle, such as through order capture and validation, order release, shipment confirmation, customer communications and settlements. This allows you to cost-effectively support complex processes, including split shipments, dropshipping, personalised products and more.
4. Bringing it all together
While you may be tempted to use a range of single-purpose applications for inventory management and fulfilment, complications can arise when attempting to connect each separate application in the supply chain. A smarter and more thorough approach involves adopting platforms like cloud-based ERP applications that will be sure to deliver a best practice inventory management system. As well as helping you cater to current and future aspects of supply chains, cloud ERPs can also support other business functionality, including CRM, business intelligence, marketing and financials. With fewer integrations and a single source of truth, it won’t just be your inventory management that flourishes – your entire business will become more efficient and productive.
In today’s manufacturing and logistics landscape, it is only getting harder to stay ahead and differentiate yourself from competitors. In order to adapt to fast-moving demands, it is imperative that your business remains agile and poised for change. And given recent advances in technology, continuing to use unscalable manual processes or struggling with disparate systems will only hold you back. Employing these best practices for inventory management requires investment in the appropriate cloud ERP technologies that will allow you to tackle the challenges of modern business and remain competitive.
More than just NetSuite experts
At Annexa, we provide industry-leading solutions customised to the NetSuite platform, including supply chain management. With our in-house integrations, extensions, partnerships and full-service capabilities, we deliver end-to-end solutions for our customers to help them grow and expand their business potential. Contact us today to speak to an expert to learn whether we are the right NetSuite implementation partner for you.
Annexa is a leading NetSuite partner with extensive experience designing and implementing comprehensive and customised business systems, including payroll solutions, financial management, warehouse management and ecommerce solutions.
