Carrying Costs of Inventory (What It Is & How to Calculate It)
Gaining a deeper understanding of your carrying costs of inventory can increase profits overall, but the task is easier said ...Read Post
The success of your business hinges on having the supplies and inventory you need, exactly when you need them. Managing replenishment by hand with nothing but spreadsheets can not only clog up precious employee time, but also leaves room for costly errors.
Mistakes such as forgetting to place an order, miscounting inventory, or over ordering inventory can add up quickly and become expensive for distributors and customers alike. Carrying costs, stockout incidents, and lost time to inaccurate procurement processes can all damage your bottom line. Consider implementing these four strategies to automate and optimize your inventory replenishment work.
Counting inventory by hand is unsustainable, especially when added challenges such as labor shortages factor in. Instead, explore some of the many auto-replenishment technologies on the market, including mobile apps that scan QR codes, RFID digital kanban systems, or even automatic weight sensors. These auto-replenishment solutions take the heavy lifting off of your staff and instead allow you to easily track inventory levels and auto-replenish while keeping counts and orders accurate.
Mobile apps that allow users to scan-to-order are much faster than the old model of having an e-commerce website on a phone. E-commerce websites on a mobile app require a user to “search-to-order”, place the item in a cart, check out, etc. That model is much slower than using a mobile replenishment app that is designed to scan QR codes to order items or track usage. Use cases such as consigned inventory situations when contractors are pulling material and scanning as they go fit perfectly with this strategy, since it allows for quick, accurate, visible, real-time tracking of usage.
However, there are also many settings in which companies may need to take a more “hands-free” approach than even RFID scanning or mobile apps offer. In these cases, tools like SensorBins can track usage from remote locations, automate replenishment, and optimize inventory levels so you can spend as little as possible on inventory and carrying costs, as well as reduce the labor it takes to do inventory checks. Whether you rely on RFID scans or SensorBins, the eTurns TrackStock App is a simple and reliable automated approach to inventory replenishment.
Placing orders for replenishment should be simple, but in many cases this becomes an ongoing timesuck for distributors and their customers. Utilizing e-commerce sites or spreadsheets requires manual entry of item numbers and replenishment quantities, leaving room for errors in multiple steps. Even if the order goes through perfectly, the added time required to navigate and log in to the e-commerce site, type each item number, and navigate to a cart quickly adds up. This time eats away at employee productivity.
With TrackStock Replenish, a simple scan of an item allows you to place an order directly from any distributor. With default reorder quantities set and both audible and visual feedback for each scan, the margin for error significantly shrinks, as does the time required for each order. Order capture software like TrackStock Replenish saves time and money while decreasing errors.
Knowing when it’s time to place an order requires an ongoing awareness of stock levels. Relying on pen-and-clipboard strategies to keep track of inventory levels opens the door to wasted time, lower employee productivity, and increased errors. Time employees spend counting inventory and double-checking SKUs can be better spent on sales efforts or strategic tasks that cannot be automated.
On the other hand, eTurns TrackStock allows you to see inventory levels, order status, and usage in real time through your dashboard. By tracking usage with weight sensors or QR code scans, this app allows you to check inventory levels and auto-replenish without even visiting the stockroom. This added visibility makes it easy to get proactive and avoid stockouts, optimize inventory, and decrease carrying costs.
By tracking your usage, viewing your day-to-day inventory levels, and logging each order in the same place, you can optimize your replenishment strategies to increase cash savings for your business. Using the TrackStock dashboard, you can track data such as daily usage and view optimized min/max settings for each inventory item. In removing excess inventory, you can improve your cash savings.
These specific min/max calculations and fine-tuned data tracking would not be possible or as accurate with manual inventory tracking and replenishment solutions. Replenishing based on your actual usage and through in-depth data and demand forecasting means decreasing costs, saving time, and freeing up space. Using powerful and accurate stockroom inventory demand forecast software, eTurns allows you to carry the right amount of inventory, hence reducing both stockouts and carrying costs.
With eTurns automated replenishment solutions, you can optimize your processes to save time and money. Contact us to learn more on how automated replenishment can help your business!