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Lean Inventory Management

Inventory management is a concept that businesses of all types struggle with on a daily basis. It is incredibly important for small businesses, however, especially when their bottom line is concerned. As the term suggests, inventory management is used to describe a business’ level of effectiveness when managing their physical inventory of on-hand products in relation to supply and demand. If a company carries an inventory that is far too large, they're spending money to house and maintain inventory that isn't selling fast enough. If inventory is too lean, however, a company runs the risk of not having on-hand what is needed to meet customer demand. Lean inventory management involves walking a very sensitive tightrope, but it is a process that can be implemented in a few key ways.

Modernize

One of the most effective ways a business can achieve lean inventory management is to modernize the way the amount of stock is controlled. Keeping track of items with a "pen and paper" system may have been effective in the past, but it simply won't cut it in today's modern environment. Handheld devices, tablets, and other portable electronics equipped with barcode scanners can update inventory counts when an item is purchased or sold with a few quick clicks of a button. As products come in and out of a warehouse, inventory counts can be updated instantly—ensuring counts are always accurate.

Supply Chain Visibility

Another effective technique at achieving lean inventory management involves increasing the level of visibility a business provides their supply chain. Increasing visibility means increasing transparency across all of the suppliers working with an organization on a daily basis, regardless of where they happen to be and how "integral" they are to the company. By taking all suppliers into equal consideration, a more accurate product picture is developed as they move through the supply chain.

Reduce On-hand Inventory

Perhaps one of the most important techniques businesses of all types use to achieve lean inventory management practices involves reducing inventory whenever possible. If inventory grows too large, a huge amount of money is spent on a daily basis without seeing much in the way of positive results. Not only does it cost more money to physically house a large inventory, but it also takes a significantly larger amount of time and effort to maintain. If a warehouse is filled with an amount of stock that isn't absolutely necessary, a difficult environment is created for employees as they attempt to sift through non-essential items to find the ones they need. Reducing your inventory by eliminating unnecessary or excessive stock will help increase a company’s overall level of flexibility. It will also dramatically reduce the amount of space needed to store those items and will reduce business costs at the same time. Lean inventory management has a wide variety of benefits that can't be ignored. Not only will companies save money almost immediately by adopting this practice, but products will be placed into customers’ hands faster and more efficiently.