If we run out of something at home, we are off to the grocery or order online and sometimes get it within an hour. But, with online retailers or businesses, procurement specialists can feel like they are jumping through hoops to replenish inventory or source products to fulfill demands and expectations. You may not be responsible for inventory levels or optimizing inventory. Still, as a team member, everyone plays a part in ordering accurately and looking outside their role to see how they aid their department’s success.
Large quantities of inventory can be a challenge to manage; supply chain delays, fluctuations in pricing, can cause a loss or surplus of stock. Therefore, learning inventory optimization is an excellent skill for an influential team member while maintaining the proper inventory levels or ordering products on demand.
Stocking too much inventory requires a lot of time and money to manage. But, at the same time, little stock leads to missed needs or sales opportunities. So, what are the main elements of inventory optimization?
The right amount of stock is ready to be fulfilled; you will consider current levels, supplier lead times, seasonal trends, and storage capabilities.
Here are the elements of optimization in a simplified form:
Use data to estimate how much you will need. For example, you can look at product usage and or seasonal times of the year, like flu season, that may be occurring to predict how much is required.
The process to move products from storage to picking shelves. By restocking inventory at the right time to meet the demand to avoid backorders and delayed deliveries.
Inventory Levels & Storage
Stocking too much inventory requires time and money for a business. But, on the other hand, too little inventory leads to long wait times for patient care, which means having to substitute products. Of course, inefficiently storing inventory can also cost time in meeting customer demands.
You can support your department with inventory optimization even if you are processing an order request from your manager. First, understand the use of the products and delivery to the recipient. Then, see if there are recommendations you can contribute to your department’s success, for example:
- Can you substitute lower-cost material where possible?
- Can you reduce waste?
- Can you eliminate product features?
- Negotiate, negotiate, negotiate
Collaboration and pro-activeness are the best measure for being a team member. Unfortunately, “It’s not my job” has become a phrase commonly used in the workplace. But that doesn’t mean it should be. Sure, this attitude may help you avoid doing extra work, but it’ll probably also prevent you from advancing in your career as someone unwilling to go above and beyond.