The key goal in managing inventory is to keep just enough inventory on-hand to meet your customers’ needs, and no more. You want to avoid stock outs, but not have idle inventory sitting around.
There are a number of reasons to keep inventory at a minimum, but from a cash flow standpoint, the goal is to minimize your working capital investment in inventory.
This is how you can manage your inventory to reach these goals:
- Identify obsolete and discontinued inventory and get rid of it; sell it, dump it, or donate it. Dynamics GP can help you identify obsolete inventory by reporting on any inventory that hasn’t been sold in the past six months.
- Regularly verify the physical inventory by conducting routine cycle counts. This helps ensure that your analysis is based on “real” numbers.
- Use an MRP process to match forecast and current demand to available inventory, and plan future purchases and manufacturing orders to meet future demand. Dynamics GP includes a robust MRP module.
- If you have multiple inventory locations, make sure that everyone in your organization has access to inventory availability in alternate locations, before purchasing new inventory.
- Analyze product profitability to make sure you’re making a profit on everything you sell. Dynamics GP accurately tracks inventory costs and easily reports on profitability by product and customer. Trim your product offering as necessary to optimize your business goals.
- Quickly update inventory records for receipts and shipments so that available inventory quantities are accurate, and your analysis will yield proper direction.
Maintain your focus on inventory levels and composition to make sure that you’re delivering excellence to your customers and keeping your working capital requirements to a minimum.
Check out myGPcloud for a robust hosted ERP system.