This technique involves ordering the exact amount of inventory you need, precisely when you need it. The objective is to have as little excess inventory as possible at any given time. It’s an ideal solution for companies without ample storage space and those with smaller margins, or for those that want to reduce overspending on materials. To make JIT inventory management work, sellers must stay in constant communication with suppliers and manufacturers. Time is of the essence, and this method requires committed, streamlined software to operate smoothly.
When done correctly, JIT can decrease costs and waste, and increase efficiency. Just-in-time inventory management also has its drawbacks. Supply chain disruptions, order errors, and damaged items can cause delays, leading to frustrated customers. That's why this technique requires the right tools and meticulous tracking to keep things running smoothly.
No matter what inventory management techniques your business chooses to use, it’s critical to keep an eye on your operations during every phase of inventory management.
The 5-step inventory management process
Every step of the inventory management process builds on the last, so america phone number list it’s crucial to have all your ducks in a row from the get-go. Here are the key moments of inventory management:
Step 1 — Receive inventory and input data: When suppliers deliver materials or products, relevant data must be recorded and uploaded into your inventory management system. Pro tip: Implement AI tools to help your teams automate the data entry process. This reduces administrative tasks and improves accuracy.
Step 2 — Strategic storage: During this step, key considerations include storage space, the traffic flow of the facility, and how to make your most popular products easily accessible. AI-powered generative models trained on warehouse details and historical sales data can help here. AI can quickly uncover insights that help you optimize storage and make the best use of your space.