4 Strategies for Efficient Distribution Inventory Management
Distribution inventory management involves maximizing stock levels and your supply chain to meet demands. Several challenges can interfere with the process, but adopting a few best practices helps you streamline operations and optimize inventory.
Challenges in Distribution Inventory Management
One of the biggest challenges in inventory and warehouse management is limited visibility. Tracking and locating stock is an ongoing issue, whether you have lower or higher inventory levels in one or multiple warehouse locations or distribution centers.
Shipping and receiving processes can also compound your visibility issues. Without robust tracking during receiving, products may get lost or misplaced in the warehouse.
These issues lead to overstocking and, as a result, higher inventory costs. With poor tracking and limited visibility, you may manufacture or order more products than you need. Your inventory turnover ratio will be lower, leading to high carrying costs and poor cash flow.
Supply chain management is another challenge of inventory management. The product life cycle, seasonal changes, and supply chain disruption can all lead to overstocking or understocking. Without inventory controls or inventory management systems, you may struggle to optimize your stock for distribution channels.
Key Strategies for Optimizing Distribution Inventory Management
Successful inventory distribution and management are critical to operations and customer satisfaction. Essential strategies include increasing accuracy, using automated tracking systems, and leveraging reporting tools for greater visibility and control.
1. Ensure Accountability and Accurate Proof of Delivery (POD)
Proof of delivery (POD) is critical to maintaining accurate inventory and prevents customer disputes, allegations of theft, and costly chargebacks. It also improves staff and customer experiences, promoting trust and loyalty in your distribution business.
Paper-based POD is a simple method, but it has limitations. Customers can manually sign the document, but it’s up to your staff and drivers to retain documents and manually submit them to your office or scan and upload them to a repository.
These manual practices are time-consuming and error-prone, leading to lost receipts and invoices. Paper-based POD is also expensive and highly inefficient for processing large volumes.
A better strategy is to go paperless and leverage electronic POD systems. Collect e-signatures using a mobile device and upload them to a document and inventory management software. Proof receipts are indexed and easily accessible for accounts payable, receiving, and reporting, improving accuracy and accountability.
2. Use Automated Inventory Tracking Systems
Automation simplifies administrative tasks and minimizes manual input, applying rules to activities so that when X occurs, Y automatically happens. The goal is to offload repetitive or routine tasks that occupy substantial time and resources.
Manual counting, for example, is a labor-heavy task, prone to inaccuracies and inefficiency. Advanced smart software scans products in or out, automatically adjusts counts, or indexes electronic documents, allowing you to monitor inventory levels and location, ordering, and selling.
Adopting end-to-end inventory automation streamlines your operations, freeing your staff to focus on revenue-generating activities while keeping tighter control over products. You stay up to date with your wholesale distributors and retail partners, gaining increased versatility in the market and a better sales position.
3. Promptly Identify Incomplete Purchase Orders and Receive Paperwork
Buyers often reserve purchase orders (POs) for large quantities of products. These documents provide essential details, such as payment terms, product SKUs, and PO numbers. Without complete purchase orders, the sale can’t proceed, and you encounter unnecessary delays that affect your customer base.
For optimal distribution inventory management, adopt software that helps identify information gaps and prevents incomplete orders. Intuitive workflows, for example, recognize empty data fields and escalate to the right team for follow-up. The result is faster ordering, a clean audit trail, and less confusion during processing, leading to happy customers.
4. Leverage Reporting Tools for Enhanced Inventory Management
Your inventory data is a goldmine of information, showing you trends in sales, turnover, delivery times, shipping costs, damage rates, and supply chain issues. However, finding and interpreting these trends using manual, paper-based procedures or bare-bones technology is tedious and inexact.
Modern inventory management solutions feature reporting dashboards with real-time status on inventory levels, accounts payable and receiving, new vendors, and credit requests. With deeper analytics, you gain insights into inventory cycles and can leverage that data to optimize inventory reorders or engage in demand-driven planning.
Digitize and Organize Automated Workflows With the Right Solution
Inventory management is often a complex and time-consuming practice, but the right automated software, like WorldView, can simplify your process. Eliminate paper-chasing with intuitive workflows that organize and consolidate your documents into one central hub.
Streamline your approval process for less intensive follow-up and stay in the loop with real-time reporting and alerts. Learn more about how WorldView builds better systems for business growth.