{"id":7773,"date":"2019-02-28T19:24:26","date_gmt":"2019-02-28T19:24:26","guid":{"rendered":"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/amazon-fulfillment\/6-benefits-outsourcing-inventory-management\/"},"modified":"2021-05-03T11:30:06","modified_gmt":"2021-05-03T18:30:06","slug":"6-benefits-outsourcing-inventory-management","status":"publish","type":"post","link":"https:\/\/michaeljbrumm.com\/dclcorp-phase2\/blog\/inventory\/6-benefits-outsourcing-inventory-management\/","title":{"rendered":"6 Ways a 3PL Can Help With Outsourcing Inventory Management"},"content":{"rendered":"

At its base level, inventory management refers to tracking the goods a company has in stock. It includes such activities as ordering, restocking, storing and inventory forecasting.
\nMany small businesses think that outsourcing <\/span>order fulfillment<\/span><\/a><\/span> and product storage to a <\/span>third-party logistics<\/span><\/a><\/span> (3PL) provider means completely turning over the\u00a0inventory management<\/a><\/span>\u00a0process to them. The truth is a\u00a03PL<\/span>\u00a0can provide valuable tools and data that will allow a seller to successfully manage their inventory in the most efficient as well as cost effective manner possible.<\/span><\/p>\n

There are many ways a 3PL can help you with inventory management, here are the top six.<\/span><\/p>\n

View real-time inventory counts<\/b><\/h2>\n

Since a 3PL holds your products at their fulfillment centers<\/a><\/span>, you can check the quantity on hand, and units sold per day. This can help provide valuable insight if you have too much or too little inventory on hand at any given time. If you have too much inventory on hand it will likely cost a lot in storage fees. \u00a0And that\u2019s money that could be spent on branded shipping materials, or absorbing expedited shipping fees. Storing goods is most often based on how much physical space your products take up. By keeping your inventory at the right amount based on your customer demands \u00a0you will save money on storage fees, and put it toward aspects of your business.\u00a0<\/span><\/p>\n

Accurately predict inventory reordering <\/b><\/h2>\n

Data is king, right? By partnering with a<\/span> tech focused<\/span><\/a><\/span> 3PL you will be able to capture historical order fulfillment data to help project when you should reorder inventory (called a reorder point) to prevent stockouts and backorders. This can greatly help you improve your inventory control and cut down your lead time. You can set automatic \u00a0notifications to alert you when stock levels reach a certain point, reminding you to restock.<\/span>\u00a0If that number dips too low, you run the risk of running out of products which can lead to \u00a0missed sales, backordering, and customer service issues. On the flip side if you have too much inventory, it can result in having products that can no longer be sold due to decreased demand or being outdated.<\/p>\n

Utilize inventory management software<\/b><\/h2>\n

The right inventory management software will provide the metrics, reporting, and updates that match your needs\u2014whether that is needing to move unsold products, meeting a sudden and unexpected demand in sales, or re-calculating your inventory after making a mistake. \u00a0Accurate reporting of inventory levels is crucial, and your software should keep you on top of this when you need it.<\/p>\n

One example of inventory management software is ERP, or Enterprise Resource Planning. ERP is used to manage business activities such as accounting,\u00a0purchasing,\u00a0and\u00a0supply chain<\/a><\/span> management operations.<\/p>\n

It\u2019s also important to get comfortable using <\/span>electronic data interchange<\/span><\/a><\/span> (EDI), which any good 3PL will provide. EDI allows all partners in the supply chain access to the same real-time information. Sharing information in an electronic format cuts down on administrative time and confusion, and allows changes to be made quickly when needed. For example, the manufacturers you work with will gain the ability to share a variety of transactional information with the vendors, suppliers, and brands all at once. \u00a0<\/span><\/p>\n

Inventory management software is part of an overall inventory management system, or IMS. An inventory management system is the combination of technology, processes and procedures that oversee the monitoring and maintenance of stocked products. Those can be company assets, raw materials and supplies, or finished products ready to be sent to either sellers or end customers.<\/p>\n

Control product grouping<\/b><\/h2>\n

A 3PL\u2019s technology can provide the ability to select how you choose to group your inventory. This can include but is not limited to:<\/span><\/p>\n