That way, inventory gets instantly updated across both online and offline channels. If you have more than one warehouse or storage site, inventory management can be trickier. The best inventory management system will traverse more than one site and give insights into stock location as well as volume. It will also make transferring stock from one place to another intuitive. Changes to stock levels and movement of inventory gets updated in real-time.

Failing to track stock continually, for instance, can allow either overstocking or understocking. You’re also wasting critical warehousing space on that slow-moving stock. Setting your par levels (for both on-premise and in-transit stock) provides structure and a method of prioritization within your reordering process and is an excellent way of keeping up with demand. Par levels are the minimum quantities you wish to have in stock for each product. If your inventory counts go below that level, you know that you need to reorder that product. Your warehouse staff don’t need to run around looking for a missing inventory item because you know exactly when it sold and shipped.

Technical problems can also cause disparities between one item count and another. Most warehouses and distribution centers rely on computerized inventory management systems. But when those systems have technical issues, such as data center downtime, or there’s a delay in the synchronization between two computerized systems, discrepancies in item counts can occur. Global supply chains fluctuate daily, making it challenging to manage your inventory. Raw material shortages, economic shifts, and inaccurate lead times from wholesalers can all impact your stock replenishment.

Aisle widths are crucial in determining how much space can be utilized inside a warehouse. Although it’s quite an investment to redesign your entire warehouse layout, decreasing aisle width will pay off immediately as it will increase much needed storage. The metric tells you how fast an inventory is passing through your warehouse. It is used to measure the number of times an inventory was sold and replaced within a specific period of time. If you aren’t using a WMS, you have to first manually estimate your Inventory Cube in order to calculate your storage space utilization. With these helpful tips, you’ll be able to utilize the maximum capacity of the facility and streamline your warehouse operation.

FBA sell-through rate is calculated by dividing the total units shipped to customers in the past 90 days by the average number of units in your FBA inventory during the same period. The phrase sunk costs refers to money you have already spent and can’t recover. If stock sits on the shelf for over three months, oacian you may not be able to recover the expenses you’ve incurred in acquiring and storing the item. It helps you determine how much inventory to send and when to send it. The restock tool is included for sellers who use FBA, and provides custom recommended replenishment quantities and recommended ship dates.

Let’s look at inventory scarcity due to, for example, an incoming shipment being delayed. In a similar manner, inventory batches nearing their expiration dates can proactively be forced out to the stores that have the best chance of selling the products at full price. Typically, every large grocery retailer replenishes all or at least most of its stores every day from its distribution centers. This is because fresh products demand frequent deliveries and because the overall inventory flows are substantial enough to warrant daily deliveries. If the allocated space is very large in comparison to demand, the inventory needed for ensuring optimal on-shelf availability will not be sufficient for maintaining a visually appealing, full display. Visual minimums indicate how many units of a product need to be on the shelf to ensure that the display is visually appealing.

In brick-and-mortar retail, local circumstances—such as a direct competitor opening or closing a nearby store—may cause a change in demand. Unfortunately, data on the factor causing this change may not be recorded in any system. Sometimes, retailers’ own internal decisions also go unrecorded, such as adding a product to a special off-shelf display area in a store. A product’s pricing in relation to other products in its category often has a large impact as well.