5 Critical Strategies To Improve Inventory Management

How you can effectively improve your company's inventory management

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Warehouses play a critical role in the success of any supply chain. However, there are common inventory management problems that collectively decrease a warehouses’ overall efficiency. For example, inaccurate quantities, multiple databases and poor product identification all work together to increase confusion and mistakes. Below introduces five proven methods to improve inventory management.


Warehouses can hold thousands to tens of thousands of parts. Therefore, a concise and user friendly categorization system is needed. Some warehouses prefer to use the selective inventory control method of ‘ABC classification.’ That is, inventory parts are categorized according to their value and documentation requirements. For example, ‘A’ items are the highest value items and need to be carefully controlled, while ‘C’ items have minimal value and need only simple records. Keep in mind that every product and therefore SKU will have a unique supply and demand variability pattern. Therefore, SKU variability can be managed through the ‘ABC classification’ system. Avoid using a one-size-fits all approach to SKU tags. Regardless of the method, all inventory parts should be neatly categorized with clearly labeled selections. Consider establishing exact syntax for parts labeling.

Warehouse Management System (WMS)

No warehouse is complete without a user friendly warehouse management system. The most basic WMS will have a flexible location system, user customized parameters for tasks and built-in integration with data collection devices. A WMS will increase inventory accuracy and storage capacity while reducing cycle times and labor costs. A WMS program also typically offers excellent inventory scheduling options. In addition to this, these software programs are excellent inventory optimization tools that automatically monitor and manage supply and demand variability.

Integrate Mobile Technology

Many salespeople can actually have apps on their mobile phone that interfaces with the WMS. Mobile devices allow easy access to real-time, accurate inventory data and information. This can improve customer service and the overall supply chain speed. In addition to this, salespeople are able to immediately request replenishment requests when they notice low inventory levels in their stores. Finally, mobile technology can directly improve inventory management through being connected to the mobile POS system. That is, when customers attempt to buy an item online, they will automatically be informed of product availability limitations.

Upgrade the Shipping System

Proper inventory management depends on the ability of the warehouse system and employees to process and handle products and packages. Shipping systems that cannot cope with current number of products and packages should be upgraded. As a result, many product handling and packing warehouses prefer to upgrade their conveyor systems. This could involve mobile conveyor machines that offer flexibility and convenience. As an alternative, they could be an integrated system of strategically placed conveyor machines. Keep in mind that adding a conveyor machine is an excellent way increase inventory management and overall warehouse efficiency.

Supplier Relationships

Certain supplies will be chronically late or deliver inaccurate shipments. Often times, warehouse staff are too busy to individually respond to these random problems. However, warehouse management should closely monitor supply performance. In fact, the WMS can provide detailed, customized reports on supplier shipments. Consider using the WMS to audit supplier performance every quarter. This will assist with identifying unreliable suppliers and provide opportunities for improvement. Consider rewarding high performing suppliers with the chance to sell more, while reducing the amount of poor performing suppliers.

In conclusion, there are a variety of proven strategies that can improve inventory management performance. Categorization, mobile technology integration and warehouse management systems are excellent technology solutions. Furthermore, monitoring supplier performance and upgrading the shipping system is also important.

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