Inventory Management

Written by Linda Alexander
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Holding inventory can cost between 20 and 40 percent of its value, so efficient inventory management is crucial in your supply chain. How you manage inventory should be a strategic management goal, not just set from the operational perspective. Fortunately, new technologies have enabled companies to streamline their inventory management methods.

Companies who embrace new methods of managing inventory will be the ones to beat the competition in the marketplace. After all, handling inventory has always been an important link in the supply chain. Working with your outsource partners, rather than against them, will keep you ahead of your competition.

Automated Inventory Management

The first step in effective inventory management is a competent, accurate electronic product catalog. The catalog serves as a database for all of your products, and it links to the movement of your products through the supply chain. When your contract partners are also linked to your database, communication is smooth and you can accurately keep track of your inventory.

Customers will respond positively if you can manage your inventory well. For example, if there is a large demand for your products, you should not have a shortage. Customers still demand timely delivery so your products should be in stock. And making too many products will increase your costs to warehouse them. Being able to forecast your sales and integrate this into the supply chain process is key to balancing your inventory requirements.

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