Overcome Your Inventory Problems with These 9 Tips



Every business has inventory problems, whether they are perceived or not. 

Excess, out-of-date materials, just-in-case security stocks, stock stored in the incorrect warehouse, the stock that is not actually good enough to work but is too good to toss away and articles nearing their shelf-life limitations all add to the dilemma.

These inventory issues denote trash. They tie up business money, need material managing and take-up valuable space. 

Perhaps, most importantly, inventory issues make the warehousing work longer and more complicated, and therefore expensive than required. 

The following methodical manner can help businesses evaluate the size of their inventory issues and discover ways to restrict their result. 


1. Determine the Problem 

Begin with the idea that all inventory is an obstacle unless there is a financial reason for it. Then list the kinds of inventory issues that may signify the most significant losses, for example: 
  • Wrongly located material 
  • Out-of-date material 
  • Overstocks 
  • Faulty material
2. Ascertain the Value of Each Kind 

For instance, count the overstock by the number of weeks or months of stock on hand, and ascertain the value of these kinds. Each measurement can represent the borderline between logic and problems. 

3. Develop Auditing and Reporting Systems to Follow the Problem 

Set up a method that will automatically and periodically estimate the number of inventory issues on hand. 

Be certain that the measurements produce failures by place, product line, the maturity of the stock, and cause for the issue and so on.

 Also, give an evaluation means that will be able to pinpoint the forces underlying the measurement.

4. Set Inventory Problem Levels as a Standard Performance Measurement

Focus on short-term outcomes heads to an inclination to produce short-term solutions and to stop a project if these solutions do not produce the sought results promptly. 

This situation can be bypassed by ensuring that inventory problem levels are as valuable as productivity and short-term trades. 

As a result, they should be a regular part of the measurement of the trade operation. 

5. Build a Short-Term Remedy 

The short-term remedy is customarily easy to determine but challenging to perform: get rid of the problem-causing stock. 

The business will have to take the short-term, one-time expense of disposing of the problems. Although this may be hard, it has to be performed. This task is simpler to achieve if the business already has an equipped reverse supply chain. 

6. Plan and Schedule the Disposal of Problem-Causing Stock 

Creativity is crucial in evolving ways to dispose of the problem-causing stock. Disposal ideas, depending on the stock can include: 
  • Trading the problem stock to buyers, agents or inventory clearing houses at reduced prices 
  • Revising the stock 
  • Using for replacements 
  • Dismantling and reusing components 
  • Shifting intra-company 
  • Using for R&D, i.e., new product ideas 
  • Using for training
  • Giving to scrap 

It is important to reduce the impact of inventory problems on the business and enable values to be consumed at proper times. 

This plan may change as more businesses embrace circular supply chains in response to decreasing reserves.

7. Discover the Grounds of the Inventory Problems 

Know how the problem was caused in the first place by applying the root cause analysis method, for example. 

Timely monitoring and disposal of inventory problems help curb the loss, but the actual goal should be to limit inventory problems from occurring at the outset. 

8. Scan Problems

Recognize conditions that can create inventories to become a problem. Check for:
  • Unrealistic sales estimates 
  • Unplanned, quick-fix engineering moves 
  • Bad communication among warehousing, purchasing, scheduling, and production divisions
  • Market and technology shifts 
  • Vendor and production breakdowns to fit schedules 
  • Wrong lot sizing and ordering systems 
  • Excess security stocks
  • Incorrect inventory data 
  • Weak production planning and unworkable scheduling 
9. Create a Long-Term Remedy 

Inventory problems will remain to exist, and the extent of the problems will not be lessened until long-term remedies are affirmed. 

These remedies will most likely appear as the reasons are determined. 

In some examples, performing the remedies may involve a substantial change to current business processes; in other examples, the remedies may be comparatively simple to perform. 

The fundamental principle for controlling inventory is financial efficiency.

If inventory is the economical way to satisfy a challenge or resolve a problem, then the inventory is warranted. 

However, if there are other choices that cost insignificant to implement, then the inventory is an issue, and it should not be held. 

A long-term vision and a readiness to drill into the details and probe the situation will end in a more productive and successful business.

All export businesses, whether a supplier, distributors, or retailers, at some point, have to deal with problem-causing inventory. 

The difficulty for international suppliers is the distance between them and their buyers. Depending on their contract for inventory management, international suppliers require comparing the expense of transporting their stocks back into their inventory with the expense and potential price that can be obtained by acquiring reverse logistics services from a third party provider. 

Apparently, if foreign suppliers are using vendor-management-inventory (VMI) or just-in-time (JIT) standards, the risk of potential inventory problems is reduced.

I hope this article would be very helpful to you people. If you like this article please let me know. Put your comments below and share your experience and also ask your queries. Stay connected to read more posts like this.


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