Most are unwilling to admit it, but there’s just no hiding behind the truth — many distributors don’t have control of their inventory. From stockouts to too much of the same product, from not knowing what is in stock, to not being able to find items in their own warehouses, distributors of all sizes struggle when it comes to achieving “effective inventory management.”

When distributors have a handle on their warehouses, they can meet or even exceed customer expectations for product availability. Distributors will also have the right amount of product on hand to maximize profit and minimize inventory investment, says Jon Schreibfeder, inventory management consultant and president of Effective Inventory Management, Inc., Coppell, Texas.

Inventory management is different from inventory control, and its important that distributors understand the difference.

Inventory control regulates the inventory that is already in a distributor’s warehouse. This includes knowing what products are being stocked and how much of a particular item a distributor has available. It’s also about knowing exactly where each product is located in the warehouse, ensuring that all inventory remains in great condition, and laying out the warehouse in a way that minimizes the cost of filling customer orders.

Inventory management, on the other hand, includes the activities of forecasting and product replenishment. It determines when to order products, how much to order and the most effective source of supply for each item in the warehouse. This ensures that distributors have the right quantity of the right item in the right location at the right time.

In order to achieve better inventory management, distributors first need to improve their inventory control. With inventory being distributors’ largest assets, fixing inefficiencies in their warehouses is crucial to improving profitability.

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Maintain An Organized Warehouse