Top Tips For Better Inventory Control & Distribution
Running a retail or wholesale business that manages inventory is tough. There are so many facets to the business and so many ‘levers’ that can be pulled. With supply chains becoming more challenging than ever and margins getting tighter its critical to understand which areas of change will have the biggest impact.
Inventory and distribution software has grown a lot over the past 10 years and it will be no doubt be a pivotal part of your business, but how far do you take it? What functionality does your business actually need?
In this short article we’ll cover some of the top tips for improving your inventory control processes and improving your margins and profitability using cloud ERP software.
What Are My Options
As with all business technology you are spoilt for choice. There are hundreds of inventory and order management systems available today, ranging from very simple small business systems, through to larger enterprise platforms for growing business.
You should consider a cloud based application that offers good inventory control functionality, but also provides integrations to third party solutions for shipping, picking/packing and inventory analysis. You should also ensure the system is mobile-ready and ideally should provide wider business functions beyond inventory and distribution, such as finance, CRM and eCommerce.
Two great options to explore are –
- Zoho Books & Inventory – Modern, cloud-based software for smaller business
- MYOB Advanced – Sophisticated, Australian hosted cloud ERP for growing business
Only Track What Needs Tracking
Real time visibly of inventory is critical for any distribution business, it goes without saying you will be turning to technology to help you understand your stock levels across warehouses and understand what stock is committed, on back order or on purchase order.
The key is to only use functionality that generates a return for your business. Adding or utilising more complex features that your business requires could have the opposite effect.
An example of this might be serialisation of your inventory items. Tracking serial numbers is a time consuming process because serial numbers need to be input or scanned each time the item is moved, transfer, received or shipped. Consider limiting this type of functionality to only those items that absolutely require it. Or consider configuring the software to only capture serial numbers when the items are shipped to your customer, if it is for warranty or return purposes.
This is just one example, but the concept is important. Efficiencies the software creates can be easily lost if the system processes are too complex.
Standardisation means Automation
If you are looking to automate your inventory and distribution processes using software then you first you first need to focus on standardising your processes and information.
Generally speaking as your business grows, so does its complexity. And unfortunately, complexity is the enemy of automation.
Lets use pricing as an example. Pricing in wholesale distribution is critical, it’s a core component of achieving the margins you desire. Because of this its common to overcomplicate pricing and create very custom, specific price lists, per customer, per item, per category etc.
Maintaining this pricing is a huge undertaking and can be fraught with error.
Consider standardising your pricing where possible. Maintain categorised price lists rather than per item pricing. Consider volume based discounts rather than specific line discounting.
These are just some simple ways to reduce complexity around pricing, but there are many other areas to explore as well.
If you manage to reduce your information complexity, software can then be used to automate areas such as promotional discounts, sales person commissions and annual price increases.
Paperless Where Possible
Every business dreams of a paperless workplace but its not always realistic to remove all paper-based processes. That being said you should absolutely strive to eliminate some of the paper processes surrounding the inventory and distribution functions.
Barcoding is often under utilised and with the modern systems providing great mobile functionality barcodes can speed up the receive, pick, pack and ship processes immensely. Even if you are not ready to remove paper entirely from your warehouse, you can incorporate printed barcodes on pick lists, for example which will go a long way to removing human error.
There are also many options for shipping and carrier integrations which can help streamline the dispatch and shipping process, but as always when considering integration to third party solutions make sure you do your research and ensure it actually creates efficiency and does not disrupt it.
Play The Long Game
Software implementation and subsequent automation is a marathon not a sprint. It takes time to introduce automation in business, it requires dedication to test and refine the systems driving the automation. You cannot expect to change your entire operation overnight, but you can lay down a technical foundation that can be build upon and this will be a driver for growth and profitability.