Inventory Adventure Part 1: Five Guidelines for Inventory Intake Success
Determining inventory intake best practices for distributors and manufacturers is a tough course to navigate. What should your receiving look like? What’s your put-away process? What are the common mistakes businesses make when executing an intake strategy?
In part one of our three-part Inventory Adventure series, we’ll identify a few things to keep an eye on that will make taking in inventory a breeze.
First things first though — what is inventory intake? On paper, the definition is obvious: inventory intake is the process used to take in inventory. No surprises there. The ambiguity comes in when trying to nail down the process itself. No two businesses operate exactly the same, so the intake process will look different for every company. And while there’s no secret formula for creating an instant, perfect intake process, there are some general guidelines that will help establish an effective process for your particular needs.
Guideline #1: Don’t take in more inventory than you need.
Storing too much inventory in a warehouse is one of the costliest mistakes a business can make. Excess stock leaves money tied up in assets, and that money might not go anywhere for a long while. Leaving money tied up in goods you haven’t sold yet prohibits those funds from being used in another area of the business.
Having too much stock can grind your cash flow to a halt. Keeping excess stock on hand is a common problem for wholesalers, especially when bulk discounts play a large role in purchasing decisions. If you’re a bulk buyer, check if your vendor will deliver in smaller shipments as needed, which will allow you to save on floor space and free up funds for other investments.
Guideline #2: Keep it clean.
Messy, cluttered, and dirty warehouses are asking for trouble.
Keeping a warehouse well-organized cuts down on wasted time, and keeps things running more smoothly. If your warehouse is cluttered with plastic wrap, empty pallets, and other shipment packaging materials, it’s cutting into your storage space and impeding productivity. When they’re dealing with a messy warehouse, your team is often not able to quickly take new inventory to its proper location due to the big mess blocking their path.
Follow a strict housekeeping regimen to prevent mess and clutter, and carve out some time for cleaning and tidying at the end of each shift. This helps the next shift start productive work right away.
Guideline #3: Ditch the paper processes.
How many physical sheets of paper does it take for your company to make it through an average workday? More importantly, how much more efficiently do you imagine your company could run if you ditched that rippable old-school paper for digital, coffee-proof versions of your shipment receipts? We’ll give you a hint: it’s a lot.
By moving to digital processes in your warehouse (think barcoding!), you’re freeing up more than the physical space that paper occupied. You’re creating an environment where documents are more easily shared, easier to edit, and easier to work with overall. An office or warehouse operating on minimal amounts of physical paper is more efficient, accurate, and clean — no doubt about it.
Guideline #4: Optimize your warehouse for traffic.
Another common warehousing mistake is overlooking the need to plan efficient put-away paths throughout your warehouse. A poorly designed layout handicaps your stocking rate, which in turn can negatively affect supply chain cycle times, as well as increase excessive labor costs due to poor productivity.
In a perfect world, your warehouse employees should be able to complete stocking runs at a location close to the receiving area in your warehouse. Stocking routes won’t be perfect every time, but it’s certainly worth making an effort to maximize their efficiency.
Guideline #5: Give drop-shipping a try.
Drop-shipping items to customers introduces a whole new ballgame, but it’s definitely worth your consideration.
The biggest advantage to drop-shipping is its low overhead. Since you aren’t paying for inventory upfront, your overhead expenses can remain quite low. It cuts down on the number of employees needed to manage a warehouse, pack and ship orders, and order product, as well as the space needed to do those operations.
If you’re interested in more inventory intake advice, we’ve got you covered. Send us a message with your questions and we’ll do everything we can to help. We love hearing from people interested in improving their business operations. It’s why SalesPad was started in the first place, and we’ve got the experience to help you succeed.