If you sell or service any tangible products, inventory is part of your business world. From steel housings to tiny screws, inventory parts are necessary components to a thriving company. Managing that inventory, however, can be a major cost and frustration. If you’re running a small business, it’s time to take a hard look at your inventory management.
Could you use a more modern approach? Ask yourself if vendor managed inventory (VMI) is right for your company. In many cases, this management strategy is a miracle for productivity.
Take a look at your operations
Are you drowning in safety stock?
Do you worry about the inventory levels in your warehouse? They might seem too excessive or lacking altogether, depending on the time of year and current demand. Most businesses stock more parts and products than necessary, which is referred to as safety stock. Paying for these overages can drag a small business down.
Vendor managed inventory is a clever consideration so that you don’t drown in stocking overages. A third party takes responsibility for your inventory so that you have enough to cover your sales while avoiding too much safety stock.
Do you lack manpower/resources
You need vendor managed inventory when your small business struggles to keep up. There’s no time to create purchase orders and count inventory. You must service your clients.
VMI offers its services by taking the ordering process out of the picture. Automatic shipments occur on a regular basis with a “heads up” from the supplier. You know what’s coming in so that orders can be fulfilled with ease. Your inventory moves without stocking issues as a result.
Looking for space?
Do you look around for warehouse space? Is it in limited supply? If your answer is yes, VMI solves these problems. Controlled and continuous shipments of your popular inventory means that the items are moving out of your facility on a regular basis. You and the vendor know what’s selling so there are no rogue products capturing dust in the warehouse’s dark corners. By freeing up space, you can expand your business or consider a smaller facility. Cutting costs and opening up profit margins are the results.
What VMI is trying to tell you
Through working with VMI partners, you’ll learn about your inventory flow. It’s a fact that most small businesses don’t have the ability to analyze their inventory as much as they would prefer. VMI resources provide patterns to product purchases and repair needs. This information makes parts ordering easier for both parties. The company knows exactly what they need to stay productive.
Discovering new partnerships
As a small business, your company may be passed up by larger suppliers in the industry. They’re just too busy with their other clients. The VMI expansion today has encouraged the interests of medium-sized suppliers. They will end up being your trusted partners in VMI.
They have time for your calculations and inventory shipments. Personalized attention in this area will benefit both parties. Watch your inventory accuracy grow without much effort on your part.
Exploring task delegation
Are you ready to hand off your inventory management to another party? You’re ready for VMI in this case. Delegating tasks to another authority may be difficult at first, however. Small businesses are often the brainchild of one or two people. They want to maintain control of the company’s reputation through inventory and product shipments.
By delegating inventory-level control to a VMI partner, an entire department is taken out of the picture. Business owners can deal with more pressing matters otherwise.
Improving your reputation
Every company stumbles at times. These mistakes will hopefully be forgotten by consumers as you build your brand. Working with a VMI partner gives you a chance to streamline your operation as much as possible. They ship stocking orders based on patterns within your industry. Telling a customer that an item is backordered won’t be part of your daily tasks anymore. You’ll have it on hand for an instant sale.
MFCP can help you with your vendor managed inventory questions and solutions. Stop the endless cycle of counting and recounting your stock. Allow a third party to specialize in your small-business dealings. The profit potential is staggering to imagine with technology by your side.