Your business thrives on the trust of your customers. When your customers order a product, by default they trust that you will have the product in stock and ready to ship. However, some products which you offer do not move from shelves as quickly as others. When you keep stocking products which are not being purchased, even when you order them to ensure they will be in stock when a customer might want them, you face a problem with overstocking. Storing these products for a long period of time costs you space in your warehouse which consequently costs you money. Here are three ways you can avoid overstocking and an overload of inventory.
Invest In Business Intelligence. Stop blindly overstocking your warehouse by investing in business technology. An inventory management solution can give you a better look at the movement of products within your warehouse. If all of your products are scanned into a database, you can then see which products are moving and which have been sitting for a while. This way you can order the products you need and forgo the products which are not being purchased and do not need to be replenished quite yet. While business intelligence will cost you money up front, you can stop wasting money on unneeded inventory.
Know What Is Trending. Do not risk overfilling your warehouse with unneeded inventory since you do not know what is trending at the moment. If you are ordering the same amounts of product you always have without knowing the trends, you can just as easily run out of a hot item as get stuck with too much of an item which is not on trend. Implement some type of requirements planning or forecasting demand manager solution to identify trends in inventory and stock your shelves strategically. Forecast scenarios to help you determine what you should stock up on.
Remember Your Customer. You should know your customers and predict their needs. If you know when a customer places their orders and what the usual products in their orders are, keep your warehouse well stocked with those specific products at those specific times. Of course you should still have those often ordered products on hand in case a customer needs them at a time that they do not usually order. You can also save money with these regular customers by having your supplier ship an order directly to the customer rather than having the order be processed through your warehouse first.