Maintaining inventory control is one of the greatest challenges distributors face. Inventory costs can add up quickly and – for many companies – already make up a large portion of the operating budget. As the year comes to a close and distributors review their current inventory situations, many companies will find themselves asking how they can reduce the costs associated with inventory management and improve their inventory control simultaneously. In fact, in a study performed by the Aberdeen research group, it was revealed that 60% of distributors expressed a need for reducing their inventory carrying costs and another 42% indicated a need to improve their customer service in relation to inventory management. With numbers like that, we think it’s safe to say that inventory management is on a lot of distributor’s minds.
There are several problems that come into play when a company is not properly managing their inventory. Many of these lead to significant inefficiencies that serve as the catalyst for larger problems across the organization (especially in the accounting and customer service departments). To gain control over what is probably your company’s biggest asset, you need to have the right tools, technology, and strategies in place. With the right inventory management optimization tools in your arsenal, you can better understand how inventory flows in and out of your distribution center, accurately assess your inventory status and improve collaboration among all other departments.
Many companies pair their ERP systems with an inventory management solution to improve their inventory management and obtain greater visibility into their inventory situation. Here are three key features to look for in an inventory management software solution:
While 92% of distributors use ERP software for inventory management purposes, not all of them are using modern, customizable solutions. By replacing their old and outdated ERP systems with newer, more customizable technology, distributors can achieve the results they want. Because inventory management needs vary by industry, it’s important to invest in a system that is customizable to your needs.
2. Real-Time Inventory Intelligence
Knowing how much inventory you have on hand at any given time is crucial; however, many solutions do not provide you with the intelligence you need to view your inventory in real-time. Modern inventory management solutions, such as Sage Inventory Advisor, can help companies improve fill rates by 2% – 10% and enhance their customer service. With real-time inventory intelligence, managers can access the numbers they need to make decisions quickly and easily, and customer service reps have the information they need to answer customers’ questions on the spot.
3. Purchase Planning
As most distributors know, accurate purchase planning can aid in reducing excess inventory and working capital, all while eliminating stock-out situations. With a modern ERP system and customizable inventory management solution, distributors can reduce excess inventory by 10%-15% and reduce the time spent on forecasting by up to 50%.
If you are looking to improve your inventory situation, reduce inventory-related costs, and decrease inefficiencies in your company, it may be time to invest in an inventory management solution. Contact us today to learn about how Sage Inventory Advisor (along with Sage 100 ERP) can help you begin reaching your dreams of simplified inventory management.
For more information about Sage Inventory Advisor, click here.