24th February 2022

The value of good inventory management

Any business that sells products can benefit from effective inventory management and the knock-on impact of getting this area right can affect multiple areas of the organisation, as well as the customer experience. 

On the reverse side, getting inventory management wrong can have a hugely negative impact on many parts of the business, can cause delays and unfulfilled orders which will cost the organisation money and their reputation. Poor inventory management can affect cash flow and cause all kinds of problems and bottlenecks within the business that leave customers dissatisfied as well as a potential loss in revenue. 

What is inventory management?

In its simplest form, inventory management is the process of ordering, storing, making use of or selling whatever it is that the business does. This might be raw materials or components for a manufacturer, or could be finished products for a retailer, and also includes any processing or storage required between the inventory entering and leaving the chain.

What are the benefits of good inventory management?

Having great visibility, awareness and control over your inventory at all times means that businesses know exactly what they currently have in terms of materials, components or products, can forecast what they will need/use/sell in the next period and plan in future orders ahead of time to help mitigate any issues like delays or supply chain problems. 

Good inventory management enables:

  • Better utilisation of storage space/warehousing – often resulting in lower costs
  • A good service level – products are available or in stock when customers want them
  • Maintenance of the supply chain to avoid delays or being unable to fulfil orders
  • Effective utilisation of resources e.g. staff and equipment – better efficiency and productivity
  • Potential savings to be made when ordering – can more easily avoid times of high demand and low stocks when prices rise accordingly
  • The avoidance of delays and interruptions in operations

Improving inventory management

Understanding why your inventory management needs to improve is one thing, but how to reach your goal is another. Many businesses manage inventory in one particular way but come across frailties in their systems when they try to scale up their activity or if some of their internal processes change. By strategically planning and managing inventory in real-time, businesses can make a huge difference to the smooth running of the organisation. 

At EP4, we’ve got decades of experience in working with some of the world’s biggest manufacturers and the electrical parts, controls and products that they provide to a wide range of different industries, which puts us in an ideal place to assist with inventory management for businesses that use these components. Some of our areas of specialism include the automotive industry, the energy sector, waste management, food and beverages industry, construction and pharmaceuticals. 

In partnership with software experts Cribmaster, we can assist with inventory management and help implement a suite which will help you keep in top of what’s coming in, going out and being stored at all times, to ensure you have a useful view of the bigger picture and can more effectively plan ahead.

Good inventory management is essentially what keeps things going for many businesses and we can help you put in place the right processes to increase efficiencies that minimise your costs and maximise your revenue. With an effective inventory management strategy in place, you can avoid many of the pitfalls that cause organisations like yours to delay production or mean that you can’t fulfil orders that your customers are relying on. 

Get in touch with us today to find out more about how we can help with your inventory management.