INVENTORY MANAGEMENT SYSTEMS: Is Your Warehouse a “Where? House?”
Why implementing an efficient Inventory Management System can increase profits.
contributed by Bill Donnelly, Bac2Profit LLC
Success starts with a vision, and visions are realized through effective planning. Effective plans are what separate the winners from the rest of the pack (called competitive edge) and having a solid plan will make operations run smoother, eliminating profit-eroding errors.
The benefits for you may be significant. Successful Inventory Management Systems can reduce warehouse operating expenses by 10 to 35%, or up to 1.0% point to the bottom line (assuming warehouse operations expense is equal to 2.0 to 3.0 of sales). Imagine what a 10 to 35% reduction in inventory carrying costs would translate into $$$ savings!
Maintaining an accurate count of the products in your warehouse by quantity and location will allow you to monitor and regulate storage at the SKU level, as well as, the corresponding shipping and receiving traffic. Keeping the “where?” out of your warehouse will make your business more profitable, while lowering stress levels for you, your customers and employees.
Are inventory transactions (i.e. internal movement, decrements, receipts, etc.), that can make major differences to your financial results, being accurately tracked? Have you evaluated your inventory tracking system lately? Is it as efficient as it needs to be? If not, what have you done to improve?
Thanks to Bill of Bac2Profit for Parts I & II on this topic. Check out his blog at: bac2profit.blogspot.com and OED's Community at http://www.oedmembers.org/ for more operational tips and insights.
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