5 best practices for maintaining optimal inventory levels

To maintain optimum inventory levels, as your supply chain grows more complicated, is more difficult. Maintaining decent inventory levels is one of the most essential parts of running an online business since clients want fast delivery. 

To track inventories effectively, every online shop has a distinct inventory management strategy, but there are some common best practices for maintaining optimal inventory levels.

1. Implement an inventory tracking system

Knowing how much of each SKU is stored at each facility can help you manage inventory across your distribution network. Real-time access to inventory levels across logistics centers and sales channels is possible with inventory tracking systems.

You can also use this software to monitor your inventory, which is essential for allocating products intelligently as you extend your supply chain. By having complete access to real-time information, you may effectively allocate goods by utilizing an inventory tracking system.

2. Determine reorder points

The last thing any company owner wants to do is keep track of inventory manually since there will be no time for anything else. You may use reorder points to automate the reorder process by setting an optimal quantity.

The reorder point is the lowest quantity of goods that must be maintained in order for it to be time to reorder. The reorder quantity you choose should balance customer demand with lead times. In addition to offering alerts when your inventory levels reach a reorder point, some inventory systems also include a function that will automatically notify you.

3. Use an inventory management system

Your distribution network may be at optimum performance with the appropriate kind of technology that complements each stage of the supply chain.

You may use an inventory management system to link SKUs and orders, allowing you to view all of the inventory, fulfillment centers, sales channels, and customers in one location. To save time and enhance accuracy, many fast-growing internet businesses use an inventory management system to track inventory in real time and automate operations.

4. Communicate clearly with your supplier

A foundation of good inventory management is clear communication between you and your suppliers about your expectations and the new goods timetable. Also, keep an eye on any holidays or closures that your manufacturer may have, such as factory shutdowns.

Your suppliers’ operations should be leveraged and integrated into your inventory management system. Because your suppliers have a significant role in your supply chain, keep an eye on their performance over time.

5. Carry out inventory audits

Undeniably, inventory and warehouse audits may be time-consuming processes, especially if you’re dealing with a big quantity of goods and manually updating spreadsheets.

Fortunately, synchronizing your online store with an inventory storage system or a 3PL’s fulfillment technology can automate and digitize the process of performing regular inventory audits.