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NOTE:  Mariana Vieth is Director of Marketing at WSI, provides today’s insightful article, ‘The Importance Of A Balanced Inventory Management System.’

Mariana Vieth provides the content below.

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AUTHOR BIO: Mariana Vieth is Director of Marketing at WSI, a leading third-party logistics provider specializing in fulfillment, chemical warehousing, trans-loading, transportation, and more. Having the 17th-largest 3PL network in the United States, spanning more than 15 million square feet, WSI delivers tailored end-to-end supply chain solutions to customers who seek to increase efficiency, shorten lead times, deliver more reliable performance and minimize costs.




The Importance Of
A Balanced Inventory Management System

Small e-commerce and retail businesses face many issues in their industries, ranging from marketing to resolving customer complaints. Another difficult challenge involves predicting customer demand. Customer demand dictates which products are the hottest on shelves and the amount of inventory needed to fulfill the consumers’ needs. Customers are the lifeblood of all businesses, and therefore it is vital to maintain a balanced inventory management system.

When you perform customer product forecasting correctly, products should constantly move off shelves and get replaced with new inventory at a manageable rate. If the forecasts are off or static, however, this could lead to inefficient inventory levels that could damage your business’s reputation. Here’s what you need to know to maintain a balanced inventory.

Issues With Inefficient Inventory Management

It’s great to have inventory ready to go. Being prepared for customer demand allows for better turnover rates, where the product sits for only a brief period before being shipped out in orders. However, it is not always ideal for filling the rafters of your warehouse with different products. On the other hand, it is not wise to order too little inventory to meet demand. You can see the case for maintaining a balanced inventory management system.  Here are some common inventory problems that small businesses often face:

Too Much Inventory

  • High overhead costs: The more inventory you carry, the higher your warehouse management costs become. You may need additional staff to manage products arriving at the loading docks, put products on shelves, and pick and pack orders. You might also end up running out of room, so you would have to consider purchasing additional warehouse space to increase your inventory budget.
  • Obsolete products leading to waste: With so much inventory on shelves, there is a higher possibility that the demand for your product could decrease before merchandise sells out. If product orders stall, your stock could decline in value, as you have nowhere for it to go. You may end up decreasing the prices of inventory to get it off shelves. This issue can lead to product waste and lost revenue.
  • Unable to diversify product lines: If you purchase only a few products to fill up inventory shelves, it could be more challenging to invest in additional inventory that addresses the changing demands of customers. You might run out of available warehouse space for the new product lines, and your operations could lose their competitive edge over other companies.

Too Little Inventory

  • Missed sales: If you order too few products, you might lose the ability to fulfill all orders that you receive. Customers can get upset about having their items on backorder while waiting for the manufacturer to send out the next batch. If this happens frequently, customers may seek other companies who have the products available.
  • Supply chain disruptions: If you begin experiencing a sudden uptick in orders but do not adequately prepare, your manufacturers may experience issues making more products. Due to the lower inventory requests from your company, they may not order as many raw materials while they focus on other customers’ orders. If they receive a large order from your business, the manufacturer may have issues getting enough materials, and the supply chain could grind to a halt.
  • Damaged reputation: If you have constant backorders and unfilled orders, customers will likely avoid your company. They may leave negative reviews, hurting the entire supply chain and every manufacturer or supplier who participates. In time, this problem could lead to lower profits.

Other Issues That Can Cause Inventory Problems

  • Misplaced products: As they arrive at the warehouse, they may be incorrectly placed on shelves or pushed aside to make room for hotter items. If this occurs, you would have no idea that certain products are available, as inventory counts are off. This problem can lead to purchasing additional products when you don’t need them, resulting in product waste.
  • Inaccurate data: Another frequent problem is when inventory data is incorrect in warehouse computer systems. Workers may still use paper documents to monitor inventory levels and cannot track products as they move through the warehouse. If this is the case, incorrect inventory data could be input into computer systems. Then, when sales reps access the warehouse information, they would be unaware that the inventory data is inaccurate when marketing products and filling orders.

Strategies to Keep a Balanced Inventory

Small e-commerce or retail business can apply different solutions to achieve a balanced inventory management system. The type of strategy to use depends on the issue you face, whether your operations have too many obsolete products or products are misplaced. Here are some possible methods to help you maintain balance:

Better Customer Demand Forecasting

Understanding your customers, their location, and the products in the most demand should allow you to create more comprehensive forecasting analyses. With more precise forecasting, you can more often maintain the correct inventory levels. Some inventory management software can pull information from customer order history to create reports to manage inventory levels.

Inventory Tracking Systems

With a tracking system, you can perform inventory tracking from the moment a product leaves the manufacturer to when the order arrives for the customer—a range of software solutions and devices that you can use to monitor and track inventory.  The possibilities include GPS devices in delivery trucks to handheld barcode scanners. The requirement is to find the right technology for your operations.

Streamlined Warehouse Spaces

Organizing the warehouse space more efficiently could help prevent inventory from getting lost along aisles and ensure that the hottest products are easily accessible. Invest in an appropriate racking system to ensure the isles are free of obstructions and workers can use material handling equipment to reach the inventory. Then rearrange picking zones for increased productivity.

Keep Your Business On Track

Developing an inventory management system should provide a transparent view of the workings of your supply chain. You can understand how products travel through your order and fulfillment processes, and you may spot weaknesses that could impact productivity. By investing in the right strategies, you can eliminate data errors, improve picking and packing processes, and maintain the proper inventory turnover rates.

For more information about keeping a balanced inventory, check out the accompanying resource.


For More Insights:  Visit Elinor’s Amazon Author Page

“Communicate to Attract Interest”

Nice Girls DO Get the Sale is an International Best-Seller and Evergreen. HIRED! How To Use Sales Techniques To Sell Yourself On Interviews is a best-seller. Visit Elinor Stutz' Author Page on Amazon:

               Be A Story-Teller



As the CEO of Smooth Sale, after her near-death experience, Stutz adapted the motto, “Believe, Become, Empower.”Nice Girls DO Get the Sale is an International Best-Selling and Evergreen book – among the classics; HIRED! Helped many to secure the job they desired. 




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Sales Tips: The Importance Of A Balanced Inventory Management System

  1. Read the business news daily.
  2. Apply the best of the business news to your effort.
  3. Similarly, apply the affordable new technology to your routine applications.
  4. Continually monitor what is working well and what needs refinement.
  5. Ensure all approaches to business work synchronously together.
  6. Be attentive to all issues that arise to find the proper fix.
  7. Do not dismiss a minor issue as it can turn into a larger one.
  8. Always ask for customer feedback and ideas.
  9. Implement the better thoughts shared with you that fit with your business model.
  10. Celebrate Success!

Today’s insights are provided to help you achieve the Smooth Sale!


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