Inventory Management Best Practices for Warehouse Operations
Identifying available product stock plays a huge role in order fulfillment. Your priority should be to have an inventory management system that seamlessly enhances the supply chain to drive increased efficiency in the distribution center.
Every effective retail distribution center often prioritizes its inventory management because they understand the importance of this crucial component.
To improve your supply chain’s performance, you must adopt the best inventory management practices for optimum warehousing operations. Let’s take a look at them:
Demand Planning or Forecasting
As a vital part of the supply chain management process, demand planning is key to determining the success of your retail brand. This is because it involves figuring out the types of SKUs and the quantity required to meet customer demands.
Forecasting usually involves the gathering of historical sales data, and setting up production plans so you can meet customer demands. Pay attention to the speed with which certain SKUs sell all year or during certain peak seasons. Use the data from previous sales histories and inventory reports to determine present and future demands.
Done correctly, forecasting not only helps ensure that you never run out of stock, but it also ensures that customers get their orders very quickly. You’ll also avoid the dreaded overstocking that oftentimes, results in excessive warehouse spending.
Ox’s AI-driven platform can help improve your current warehouse management’s demand planning capabilities, through the introduction and easy integration of our forecasting modules into your current inventory management system. Want to know more about this? Talk to us today.
Data Analytics for Your Inventory System
How much data are you crunching and interpreting in real-time? Does your distribution center have a way of getting relevant data and ensuring data visibility in real-time to managers so they can make an informed decision?
If your current inventory management system cannot crunch, analyze, and interpret crucial inventory data in real-time, you have a problem. Efficient warehouses and distribution centers typically have data analyzing capabilities that help warehouse managers make smart and accurate decisions about their inventories.
For example, if your inventory management system works efficiently, you should have access to real-time data about the number of SKUs, order volume and determine if you need to restock or hold off.
Returns are a huge part of the retail business. Yet, it is a trillion-dollar problem that doesn’t get as much attention as it deserves. If it’s not properly managed, it can result in a drain on the retailer’s revenues. US retailers lost over $300 billion in revenue due to returns in 2019.
CNBC reports that 10 percent of physical retail store purchases are usually returned. The percentage is higher –about 30 percent– for online purchases made on eCommerce platforms.
How you handle the returns, however, determines if the customer will shop with you again and again. 84 percent of surveyed customers said they’ll shop with a retailer if the returns experience is positive. If there’s a bad returns experience, 73 percent of shoppers say they will avoid a repeat purchase with the retailer.
This is because customers expect retailers to factor returns into their pipeline. Set up an effective returns system that makes product intake and replacement easy for the customer. However, there’s a super-effective way to prevent or minimize the returns problem:
Ox’s augmented reality platform can help your pickers avoid miss-picks and errors in order picking. This is important considering that a significant percentage of returns are due to errors in order fulfillment. With Ox’s AR-enabled order picking system, workers can accurately pick products, minimize errors and get the orders out quickly.
For more on how Ox can help you minimize returns, improve picking accuracy, and aid returns management, contact us today.