{"id":838,"date":"2022-07-04T06:32:57","date_gmt":"2022-07-04T06:32:57","guid":{"rendered":"https:\/\/blogs.skubiq.com\/?p=53"},"modified":"2023-11-15T17:44:52","modified_gmt":"2023-11-15T12:14:52","slug":"how-accurate-inventory-management-can-help-manufacturers-create-a-competitive-advantage","status":"publish","type":"post","link":"https:\/\/www.skubiq.com\/uz\/blog\/how-accurate-inventory-management-can-help-manufacturers-create-a-competitive-advantage\/","title":{"rendered":"How Accurate Inventory Management Can Help Manufacturers Create a Competitive Advantage"},"content":{"rendered":"
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From inefficient replenishment to high holding costs, accurate inventory management can have a massive impact on a company’s bottom line if not handled properly. <\/p>\n\n\n\n

The COVID-19 pandemic was a testament to the same. Cause it disrupted the supply chain, and little could the existing systems do to help mitigate the damages. In fact, right at the onset of the pandemic, 60% of the respondents\u00a0in a survey conducted by Statista confirmed that the pandemic had disrupted their supply chains.\u00a0<\/p>\n\n\n\n

While such natural, unprecedented disruptions are inevitable, the key to mitigating or, at least, curbing such shocks lies in efficient inventory management<\/a>. For businesses to survive and eventually thrive, they must create a competitive advantage. They can do this by optimizing their processes, acting in anticipation of probable disruptions, and continuously monitoring their inventory levels.<\/p>\n\n\n\n

Here’s a more profound rundown of how accurate inventory management bolster’s a company’s bottom line and lends it a competitive advantage.<\/p>\n\n\n\n

Improved Responsiveness to Customer Demand<\/strong><\/h2>\n\n\n\n

Today, consumers have limited patience for long waits, which means that companies must be able to respond quickly to changing demands. And to achieve this, they need to have quick access to information on inventory levels. That way, they can adjust their supply in time to meet the market’s ascending\/descending demands.<\/p>\n\n\n\n

An efficient inventory management intervention in place ensures that companies are more responsive. As it enables them to get information on inventory levels within their control in real time. This allows them to minimize the amount of time it takes to assess actual demand, drive fulfillment, and minimize losses.\u00a0<\/p>\n\n\n\n

Of course, this results in increased sales since the customers receive orders faster than they anticipate. Considering that more than 30% of businesses miss shipment deadlines owing to poor fulfillment visibility, the benefits of an inventory management solution speak for themselves.<\/p>\n\n\n\n

Reduced Inventory Carrying Costs<\/strong><\/h2>\n\n\n\n

Inventory is a significant cost in the manufacturing process, and reducing that can give the company a much-needed edge over its competitors. As elucidated above, efficient inventory tracking means less time is needed to get the new products out on the market. As such, the carrying or holding costs decline, which is a net positive for the company.<\/p>\n\n\n\n

Efficient inventory tracking also makes the supply chain more responsive and efficient, encouraging customers to purchase consistently. This leads to stable demand, which gives vendors a sense of security that they will be able to offer them products without delays or shortages.<\/p>\n\n\n\n

Not to forget that accurate inventory tracking powers the understanding of “too much” inventory. In that case, businesses can sell off some of their products before they become obsolete or damaged. Altogether, this results in better cash flow and, more importantly, reduced carrying costs.<\/p>\n\n\n\n

Better Gross Profits<\/strong><\/h2>\n\n\n\n

One of the most apparent benefits of\u00a0inventory management\u00a0is that it helps businesses make more money by improving their gross profit margins. If they have done an excellent job managing their inventory levels by keeping them low, then even if there is any unexpected change in demand, they will still be able to meet it without having to rush out new orders or put pressure on your suppliers.\u00a0<\/p>\n\n\n\n

This, in turn, will reduce the number of lost or delayed orders, helping businesses cut down on the number of stockouts, lower the probability of exceeding the inventory sitting on the shelf and gathering dust and improve throughput levels.<\/p>\n\n\n\n

Increased Cash Flow and Reduced Working Capital Requirements<\/strong><\/h2>\n\n\n\n

The longer it takes a company to sell its products, the less cash it has available for other uses. With up-to-date information about inventory levels and sales trends, manufacturers can better manage their inventory so that they only order new stock when needed. <\/p>\n\n\n\n

This reduces the amount of money tied up in inventory, increasing profits and allowing manufacturers to invest more in growth strategies such as research and development (R&D) or marketing campaigns.<\/p>\n\n\n\n

The Just-In-Time (JIT) Benefit<\/strong><\/h2>\n\n\n\n

Toyota and later a host of organizations popularised the Just-In-Time (JIT) movement as a way to reduce waste and increase efficiency. This method has been used in manufacturing for decades and has proven effective in reducing costs while improving customer service. <\/p>\n\n\n\n

The basic idea behind JIT is that you only produce goods when needed. And you don’t have a lot of excess inventory sitting around your warehouse or on the back of trucks going from plant to plant. <\/p>\n\n\n\n

In the modern-day, where companies like Amazon and Uber have pushed for increased on-time deliveries, manufacturers are likely to adopt this practice for their own businesses.<\/p>\n\n\n\n

By reducing inventories at both ends of the supply chain, manufacturers can save money on storage costs. And also improve customer satisfaction by delivering orders on time.<\/p>\n\n\n\n

Conclusion<\/strong><\/h2>\n\n\n\n

Inoculating against the unforeseen consequences of poor inventory management is an intelligent (and essential) business move. Doing so allows manufacturers to minimize costs and focus more on their core competency: producing great products. <\/p>\n\n\n\n

How your company chooses to use inventory management software will depend on a variety of factors. But the value of having an inventory management solution in place should not be underestimated.<\/p>\n\n\n\n

In the long run, it can help your company establish a competitive<\/a>\u2014and enviable\u2014advantage.\u00a0<\/p>\n\n\n\n

SKUBIQ is a robust inventory system that advocates for high inventory availability, faster fulfillment time, and seamless product delivery. Request a free demo today!\u00a0<\/p>\n\t\t\t\t\t\t<\/div>\n\t\t\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/div>\n\t\t\t\t\t<\/div>\n\t\t<\/section>\n\t\t\t\t

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From inefficient replenishment to high holding costs, accurate inventory management<\/p>","protected":false},"author":11,"featured_media":54,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_kad_post_transparent":"default","_kad_post_title":"default","_kad_post_layout":"default","_kad_post_sidebar_id":"","_kad_post_content_style":"default","_kad_post_vertical_padding":"default","_kad_post_feature":"","_kad_post_feature_position":"","_kad_post_header":false,"_kad_post_footer":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[17],"tags":[12,18,19,11],"class_list":["post-838","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-inventory-management","tag-inventory-management","tag-inventory-management-software","tag-inventory-management-solution","tag-warehouse-management"],"yoast_head":"\nHow Accurate Inventory Management Can Help Manufacturers Create a Competitive AdvantageHow Accurate Inventory Management Can Help Manufacturers Create a Competitive Advantage – SKUBIQ<\/title>\n<meta name=\"description\" content=\"Inventory management is essential as it helps in times of unforeseen situations. 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