Inventory Management for Growing Businesses

Inventory Management for Growing Businesses

Inventory can appear simple when a company has a limited product range, one warehouse and relatively few orders.

As the business grows, that changes quickly.

More customers create more demand. More products increase the number of stock movements. Purchasing becomes more complicated. Additional warehouses or sales channels make it harder to understand exactly what is available.

Eventually, knowing how much stock the business owns is no longer enough.

The company needs to know where the stock is, whether it is already reserved, what is arriving and what customers are expected to require next.

Inventory problems are often information problems

Many stock problems begin because different departments have different information.

Sales believes a product is available.

The warehouse knows the physical quantity is lower.

Purchasing has stock arriving next week.

Another customer order has already reserved some of the remaining units.

Management is looking at a spreadsheet created yesterday.

Every number might be technically correct within its own context, but the business still lacks one reliable version of inventory availability.

What should a modern inventory system show?

A useful inventory system should provide visibility beyond a simple quantity-on-hand figure.

Businesses may need to understand:

• Physical stock.
• Reserved quantities.
• Available quantities.
• Incoming purchase orders.
• Expected customer demand.
• Stock by warehouse.
• Internal transfers.
• Reordering requirements.
• Lead times.
• Product movement history.

When this information is connected, sales can make better promises to customers and purchasing can make better replenishment decisions.

Inventory should connect to sales and purchasing

Inventory management becomes much more powerful when it is part of a wider operational system.

A confirmed customer order should affect availability.

A received purchase order should update stock.

A shortage should become visible to purchasing.

A completed delivery should reduce inventory without somebody manually updating another spreadsheet.

Connected business platforms developed by companies such as OpsMavix can bring inventory, sales, purchasing and fulfilment into the same operational workflow.

Better stock visibility improves cash flow

Inventory is also a financial issue.

Too little stock can mean delayed customer orders and lost sales.

Too much stock can leave cash tied up in products that are not moving.

Better information helps businesses find a more appropriate balance.

The objective is not necessarily to hold the smallest possible amount of stock. It is to understand demand, supply and availability well enough to make informed decisions.

As a company grows, inventory management therefore becomes much more than counting products.

It becomes a core part of how the business controls customer service, purchasing, working capital and operational performance.