In most manufacturing and distribution companies, inventory is the largest component of business capital. When 45 to 90 percent of your capital is tied up in inventory, every improvement you can make in your warehouse practices has a large impact. The more you can take control of your inventory costs, the more you can invest in other products or even expand operations.

Using a warehouse management system (WMS) to understand your customers’ order cycles (the time between orders) and acting on that data to provide timely fulfillment can help improve inventory levels. Each customer may be on a different order cycle, which can make it difficult to adequately manage inventory. Let’s take a look at the impact that order cycles have on inventory control, and how understanding this impact can help you with inventory levels.

Assessing Demand for Your Products

No two products sell exactly the same in a given period. Assessing the demand for your products can help you establish order cycles. When you know the times of highest demand for each product, you can ensure that you have enough on hand to meet orders. Conversely, you can also control stock levels during downtimes in the order cycle to prevent waste. Discovering demand cycles is far easier with the right warehouse management system.

Understanding Your Order Cycle Helps Improve Profits

Another way in which understanding order cycles can benefit your business is by examining the relationship between order cycles, warehouse management, shipping, and cost of goods. If you know your order cycles, you may be able to negotiate better terms with your vendors to reduce cost of goods ahead of time. Not only will you have less items in your warehouse during slow times, but during business times you may be able to order in bulk with a negotiated price.

Are Inventory Control Efforts Worth It?

Consider whether or not inventory control efforts are worthwhile for all products in your warehouse. Some high-cost products may justify the effort of tight management, while others cost so little or take up so little space that spending time on ordering cycles and inventory management isn’t worthwhile. You must balance the costs versus the benefits on every aspect of inventory control. However, with a WMS in place, evaluating inventory levels is quick and efficient.

Out of Stock Messages Frustrate Customers

Sometimes, improved inventory control methods are helpful simply to reduce the number of “sorry, we’re out of stock” messages your customers see online or hear from their sales representatives. Nothing is so frustrating for your customers as learning that a part or product is out of stock just when they need it. “But you know that I always order that in January!” they may say, and they’re right. Using a WMS, you can know your order cycles and avoid too many frustrating “out of stock” messages.

Warehouse Management Systems: Improved Information, Higher Profits

Warehouse management systems can help businesses control costs and maximize profits. PositiveVision can provide a solution for inventory control that can help you with order cycles, product stock status, and more. With the data display dashboard, you can see instantly which stock levels need replenishing. Order cycles can be calculated and new items ordered quickly to ensure that you’ll rarely give customers that frustrating “out of stock” message.

PositiveVision has the expertise and experience to help you find the right balance between stocking the right inventory and minimizing costs. Our WMS solutions will help you ensure that your operations run as smoothly as possible while lowering costs, enhancing vendor relationships, and increasing customer loyalty.

Contact us to learn more about warehouse management systems.