As the business-to-business industry evolves, suppliers need to be aware of the changes in technologies and strategies to achieve the most efficient, cost-effective operations. Managing your B2B inventory is a large part of this process. Though beneficial to profit and growth, increased sales and customers can stretch your inventory control processes beyond your capabilities unless you have spent time optimizing and streamlining your management workflows.
Understanding Inventory Control
This is a systematic approach that oversees the initial sourcing, interim storage and final sale of the products you offer. It carefully tracks and controls the inventory to confirm you carry enough products in the right places to meet the demand from customers. It also considers having the products at the time when it is needed and at a price point that meets customer purchasing needs. Accurately tracking your inventory provides real-time information to guide supply and fulfilment concerns.
Benefits of Having a Strong Inventory Management Process
A key benefit of maintaining strong inventory control is avoiding the problems of under or overstocking. There are several other reasons why you need to effectively manage your inventory.
- Sales growth will bring challenges
- Detect problems early on
- Consistently meeting demand
- Improve investment decision-making
- Efficiently handle peak or seasonal ordering
- Streamline pick, pack and shipping processes
Common Mistakes With Inventory Management
When developing a strong management process, you need to be aware of the common mistakes that can compromise your resources and jeopardize your sales. Correcting these issues before they become serious concerns can make your management process more effective.
Relying on Dated Technology
While the initial gold standard for inventory control, the use of spreadsheets is outdated. Inventory management software is scalable, reliable and specifically designed for keeping track of every aspect of inventory. Even if you have decided to use software to manage your trade credit or accounting functions, you are falling behind if you don’t automate inventory tracking.
Ordering a Lot of Product
Many B2B suppliers believe that having a lot of products on hand helps fulfil orders fasters, but there are problems with overstocking. If the goods are perishable, you run the risk of expiration and waste. If not, you are wasting storage space and potentially typing up needed resources. Watch your order volumes to maintain better control over your inventory.
Automation makes it easier to track your inventory more consistently. Not only will you run into problems with employees following the rules or procedures to track the flow of your goods, but you can also run into issues with your customers. When trade credit is issued and goods exchanged, it creates a substantial risk for the supplier. Missed deadlines create expensive debt, leaving you with lost products and no payment. While extending trade credit is a bonus for both you and consumers, tracking these irregularities with automation saves you from losing money.
Improving Your Inventory Control
To prepare for increased sales and to streamline your operations, consider these inventory management tips. These solutions create real-time inventory, giving both you and your customers accurate ordering and fulfilment information
1. Develop an Omnichannel Strategy
This management approach will let you keep track of inventory across your different sales channels. From online orders to your physical store location, every consumer needs to have the most accurate information considering supply. Mistakes in product availability can cause customer dissatisfaction and cause them to take their business elsewhere. Consider an omnichannel inventory software.
2. Minimize Supply Chain Complexities
The leading supply chain complexities plaguing B2B suppliers include customers expecting expanded services, faster lead times and more personalized experiences. Supply chain interruptions based on economic or global factors affect the customer experience, as these impact your ability to get enough product when needed and fulfil demand. A robust inventory control system uses data to forecast needs well ahead of time, creating more efficiency and preparedness with restocking.
3. Customize the Supply Experience
Business consumers have high expectations, but the large orders they place are generally the backbone of your revenue. Creating a customized purchasing experience for each consumer can tailor your operations and maximize where you invest in your inventory. Even more so, using an order management system to maintain better control over the order-to-payment cycle for consumers ensures that you are receiving timely payments for the goods received. Rather than investing in products that ship to slow or non-paying customers, you can address these accounts and shift your focus on other consumers.
4. Reduce Returned Inventory
Returned inventory is a concern for B2B suppliers but keeping customers happy is crucial to hanging onto important business relationships. Having to put large qualities of items back into stock impacts accounting, electronic inventory and physical storage space. Reduce the likelihood of returns to avoid the costly process of managing returns. Optimize your product images and listings, and conduct quality checks for products that are shipped. Track commonly returned items and change manufacturers if needed. Invest in quality packaging and shipping processes.
5. Rely on Data Analytics
When putting an inventory control system in place, thoroughly review the data and reports generated from the software. Analytics can present both a broad overview of the company sales data and more focused insight into specific product sales or consumer accounts. Accurate and detailed data will help with marketing campaigns, new product offerings, logistic decision-making and optimized processes.
6. Strengthen Customer Accounts
Keeping your customers satisfied ensures long partnerships and steady revenue streams. However, accounts need to be in good standing and financially responsible if they are going to be profitable to your company. Financing options make your products more accessible to customers while creating a risk for your company. Manage these risks and the customer’s responsibilities with an automated, digital platform.
Managing the Financial Aspect of Inventory Control
With Pencil One, your business has the digital resources needed to quickly identify financially responsible customers and provide options for both payment and collections. Providing trade credit options, as it relates to inventory control, keeps customers both happy and accountable, leading to long-term relationships with your company. Contact us today to find out more.