Proper inventory management is a fundamental component of successful businesses in the manufacturing, wholesale distribution, retail or field services sectors. It helps maintain the right amount of stock, control expenses, streamline warehouse operations and provide customers with a smooth experience. By effectively managing inventory, businesses can improve efficiency, reduce waste, and stay competitive in the ever-changing market.
In this blog, ScaleNorth will share what inventory management is and how NetSuite can help organizations optimize their inventory.
What is Inventory Management?
Inventory Management is a process of tracking your inventory in the supply chain process starting from purchasing, receiving, transferring among locations to shipping to customers and managing customer and vendor returns.
The main inventory management challenges that companies are usually facing are:
- Inaccurate counts
- Absence of real-time data
- Disconnected data when
- Overstocking which leads to locking companies’ capital in obsolete inventory, increasing operating and holding costs, and reducing profit margins
- Understocking of items with a high demand
- Poor demand and supply forecasting
- Inventory losses due to spoilages or damages
- Delayed manufacturing process when needed raw materials have not yet arrived or have not been ordered on time
Video: What Is Inventory Management?
As we can see, these are just top challenges that can lead to major consequences and impact business performance in a negative way.
Accurate information about your inventory will help you identify:
- Your current inventory counts
- Quantities committed to sales orders
- Your need to order more materials from your vendors or produce more goods
safety stocks - Your need to re-allocate goods among several distribution centers based on customer demand
Efficient inventory management will allow your company to streamline stock levels, avoid overstocking and shortages, ensure efficient management of perishable inventory, manage returns, and meet customers’ demand on time.
Why is Inventory Management Important?
According to NetSuite, Inventory management is crucial to a company’s health because it helps make sure there is rarely too much or too little stock on hand, limiting the risk of stockouts and inaccurate records. In addition, public companies must track inventory as a requirement for compliance with Securities and Exchange Commission (SEC) rules and the Sarbanes-Oxley (SOX) Act. Companies must document their management processes to prove compliance.
How NetSuite Can Help
NetSuite Inventory Management is a helpful solution for companies that are looking to optimize their inventory management process and have real-time visibility into it.
NetSuite allows you to:
- Have real-time access to inventory costs, stock levels, activity, valuation, revenue generated, profitability and other critical inventory data across multiple locations
- Take more data-driven actions such as adjusting reorder points for the items which are frequently back ordered
- Better forecast demand and lead time
- Use bins to track items by bins which can help with more efficient organizing storage spaces
- Use historical data to better plan demand for certain items
- Create supply plans from the demand plan and use it for purchasing departments to meet internal and client needs on time
- Track item warranties and returns
- Easily adjust inventory to account for errors, losses, or damaged inventory
- Have a real-time dashboard with the most important KPIs in your inventory control process
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About the Author
Anastasia brings great expertise as a certified Oracle NetSuite Consultant. She ecompasses a range of skills and knowledge vital to NetSuite implementation and optimization. With a keen understanding of SuiteFoundation principles, she’s equipped to provide insightful solutions that drive business success.