Expanding means becoming complicated with inventory and order management
Once an organization begins to expand, it tends to diversify its product portfolio, expand its customer base, open more stores, and even create new marketing channels. While this expansion generates income, it also creates complications. The inventory management system and order management system that used to handle a limited set of products and a small number of distribution centers can no longer cope with the challenge.
This is the stage where companies start to experience problems with their operations. They suffer from stock shortages while maintaining excessive inventory values. Orders generate numerous exceptions and require constant attention.
The risk of solving problems by stocking more inventory
The obvious solution to increased demand is to stock up just in case. One does not want to disappoint customers and therefore stocks up on extra inventory or warns buyers to be more careful. Order management insists on quick delivery. As a result, one develops an oversized and chaotic inventory system.
This solution has its drawbacks. Working capital becomes extremely high, obsolete stock piles up, but the assortment remains incomplete. The point is that inventory does not guarantee good order fulfilment. It only ensures that money is blocked in inappropriate locations.
Scalable inventory management
As businesses scale up, they must have inventory management systems and order management systems that can scale as well. Such systems would include:
· Standard policies for different groups of products;
· Realistic inventory targets based on fluctuating demand;
· Clear priorities in replenishing inventory items;
· A realistic assessment of promises made to customers.
Using spreadsheets for managing inventory and orders will soon prove inadequate since most of the time is spent maintaining the spreadsheet rather than making important decisions.
How StockM enables emerging businesses to retain control over processes
StockM inventory management system is built specifically for the needs of companies that are focused on increasing the scale of their operations. It automatically performs analytics, adjusting its own dynamic buffers according to changing demand for goods and their supply chain conditions. If the sales velocity increases, StockM increases the dynamic buffers. In case sales are going slow, it decreases the dynamic buffers to avoid silent overstocking.
Thus, StockM keeps up with the increasing pace of inventory management, as there is no need for managers to manually adjust the parameters of thousands of SKUs. Furthermore, the system gives planners valuable indications related to the management of orders. So, it becomes possible to understand which products should be guaranteed during orders, and which cannot be promised safely.
Managers have a better understanding of how inventory and orders affect the company’s bottom line. The system indicates which items have high inventory values, what kind of turnover they have, and which adjustments can be made to release some cash flows without compromising service levels. This way, making decisions regarding market and service expansions becomes much easier.
Growing with confidence, not chaos
With proper support for inventory management and order management through StockM software, growth becomes something else. Expansion of new products and new warehouses does not lead to a lack of visibility. Employees understand what products bring in revenue and how to ensure their security. Clients get increased availability and guaranteed delivery. And finance gets the understanding that working capital is managed rather than going off the charts.
StockM provides an actual solution to those who look for ways to scale their inventory management process and enhance order management while maintaining healthy working capital.
