18 Jan Inventory Management: Finding Balance
Inventory management is one of the most important processes in commerce. Yet it can be time consuming to get it right. Inventory management is like a balancing game; Having too much inventory means spending extra money on storage, or risking reaching expiring dates, while having too little inventory means missing out on sales.
Finding the right balance is a demanding task. Let us show some examples and explain how Marello can help out.
1. No more distressed stock in inventory
A well known problem in inventory management is distressed stock. Distressed stock consists out of products that have passed the point where they can be sold for the normal price. Examples are fresh products that reach the expiry date and products that do not sell quick enough because they go out of season or our of style. Also distressed stock includes the risk of turning into dead stock which cannot be sold anymore. Either way, having distressed stock leads to a loss of revenue. Products end up getting thrown away or take up valuable storage space, driving up costs.
Distressed stock is the outcome of a mismatch between inventory levels and supply and demand. With Marello it is easy to find out how mismatches can be avoided.
By using the reports and segments tool, insights into optimal inventory levels can be acquired. Through the analysis of comprehensive data inventory purchases can be altered, lowering the chances of distressed stock.The picture above shows three separate standard reports: low stock, best selling and worst selling. However, the analysis tools are fully customizable to fit individual needs.
In future releases Marello will include forecasting modules, making it even easier to decide how many products should be in stock during specific periods.
2. Knowing real-time inventory levels
On the other hand, there is the possibility of not having enough stock. It can be hard to know exactly how many products are available for sale. Items can be sold, yet still show up in stock levels (for example because they have not been shipped yet). This may lead to selling products that are already virtually sold, resulting in longer delivery times and disappointed customers.
The solution is to have a real-time view on stock levels. Marello gives access to information about real stock (stock that is physically present), allocated stock (reserved stock) and virtual stock (stock that is available for sale).
By knowing real-time stock levels, new stock can be purchased before the inventory is empty. Purchase orders can be created for products that need restocking. There are various handy features to ensure that products are always purchased in time. A ‘Purchase Stock Level’ can be set for separate products in order to determine when new stock is needed. In this case the real stock level is used as a reference. Another possibility is to set a ‘Desired Stock Level’. This feature advises how many new items have to be purchased in order to refill the desired amount. In this case the difference between the ‘Desired Stock Level’ and the ‘Virtual Stock Level’ is used.
3. Easy to use
A comment that is often heard is that inventory management systems, such as ERP-systems, are too complicated. The problem with many software solutions is that they are not very user-friendly. That is why Marello has spend a lot of time on its interface design. The dashboard as well as the menus and tools are designed on an intuitive base. In that way even the non-digital-savvy user will be able to work with all the functionalities right away.
Marello: Finding Balance in Inventory Management
Inventory management can take up quite some time and may lead to significant problems. Yet with Marello’s ERP software inventory management becomes much easier. Inventory tracking, comprehensive analysis and an automated workflow help to keep revenues up. The user-friendly interface makes sure that you can get started right away. Helping retailers to always have a balanced inventory, that is our goal.