Wholesale distributors frequently operate on margins that are diminishing more and more every day. These firms distribute nearly every type of product imaginable, but despite the variety of their locations and industries, they typically have very similar inventory-related problems. Knowing that your inventory can be your most important asset in distribution, proper inventory procedures are critical for success. Here are some common inventory challenges that wholesale distributors face:

Experiencing “stock outs” of other products. This results in back-orders, lost sales and dissatisfied customers.

Not knowing what is in stock. The on-hand quantity in their computer system does not agree with what is actually on the shelf in their warehouse.

Their inability to locate material in warehouse, i.e., knowing the material is “out there somewhere” but not knowing exactly where.

As a result, many distributors don’t have control of their inventory; in fact they feel that their inventory is controlling them!  If you are in thisWarehouse Man walking situation, please don’t give up. Achieving effective inventory management does not require a PhD or Herculean efforts. You just need a systematic plan, along with the proper technology, to achieve effective inventory management (EIM).

What is EIM? EIM allows a distributor to meet or exceed customers’ expectations of product availability. This is achieved by maintaining the amount of each item that will maximize their company’s net profit or minimize its total inventory investment.

EIM is the result of outstanding inventory control. What is the difference between inventory control and inventory management?

Inventory control is managing the inventory that is already in your warehouse, stockroom or store. That is:

   Knowing what products are “out there” and how much you have of each item.

   Knowing exactly where each piece of each product is located in your warehouse.

   Ensuring that all inventory remains in salable or usable condition.

   Storing products to minimize the cost of filling customer orders.

Inventory management, on the other hand, is determining when to order products, how much to order and the most effective source of supply for each item in each warehouse. That is, ensuring that you have the right quantity of the right item in the right location at the right time.

Inventory management includes all of the activities of forecasting and replenishment. The question we often asked is, “where do we start?” The answer is: inventory control!

Investing in inventory control distribution software is a great way to get EIM. And EIM is a key to staying competitive in this demanding and complex industry.

Thank you for reading this article. Learn more about inventory control distribution software and feel free to contact me with any questions or comments about better supply chain management technology. I look forward to hearing from you.

Learn more about inventory control distribution software