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Inventory with each department in the company will have a different "perspective". For example, for production supervisors, inventory is seen as a measure to "cover up" in case errors occur in the production process. However, accountants treat inventory as a valuable asset. So how can businesses reduce inventory to a level suitable for all departments? Take a look at the following article.<h3>1. What is inventory?</h3>Many people think of inventory as unsold products left in stock. However, this is a misconception. In fact, these are products that the business plans to sell later. It is considered as the inventory of a manufacturing enterprise. It is also part of the company's assets. Inventories are closely related to production and sales. However, if inventory management is not good, businesses will face the situation of not being able to sell goods, obsolete goods that are no longer suitable for the market. This leads to cost loss for the company. This is also the reason many people think of inventory as unsold goods left in the business.<h3>2. How does inventory affect the business?</h3>For businesses, inventory will sometimes be a "salvation" for urgent orders, production not in time to deliver to customers. But this case rarely happens because most companies only store goods at a safe level, in order to provide stable goods to avoid the situation of insufficient supply and demand. Too much inventory leads to high consumption pressure, for items with an expiry date, it is easy to be overdue and must be destroyed.Therefore, too much inventory will be a threat to the business as well as to maintain the capital flow for the business.In addition, inventory in the production process is a liability, or more precisely, a disadvantage because it constrains the working capital that may be needed in the short term. In cases where it is necessary to raise capital or change the business model, inventory is the burden and trapped capital of the business. One of the reasons businesses should not have too much inventory is cost. The production itself but cannot be sold immediately is a "dead" cost of the business. At the same time, businesses also have to spend warehousing and labor costs to preserve and inventory that quantity of goods.Read more: <a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/news/en-manage-iso-standard-warehouse-with-smart-warehouse-78">ISO warehouse management with Smart Warehouse Solutions</a><figure class="image"><img src="https://api.estuary.solutions/estuary-web-mediafile/file/358269ca-276a-41d4-a310-d4a81caf0c40" alt="Quản lý hàng tồn hợp lý giúp tăng hiệu quả cho hoạt động kinh doanh của doanh nghiệp"><figcaption>Reasonable inventory management helps increase the efficiency of business operations</figcaption></figure><h3>3. Six methods to reduce inventory during production</h3>Today with improvements in management processes, inventory control has improved even more. Here are 6 methods synthesized by Estuary to help businesses optimize inventory and significantly reduce operating costs.#1 Reduce lead time from suppliersWith just a few small steps in ordering from suppliers, it also helps businesses limit the amount of inventory. For example, by using a domestic supplier, a business can reduce its delivery time by up to two weeks. Ordering in small quantities more often, as opposed to ordering in bulk, has been shown to reduce wait times.One method to help reduce supply chain time is “supply chain mapping”. A supply chain map, usually created at a higher level in the business, and it outlines the company's supplier network. It provides transparency, helping businesses determine how to reduce delivery times.#2 Reduce production timeThe duration of a production cycle is the amount of time it takes to complete the different stages of the manufacturing process. The faster these processes are performed, the shorter the cycle times. Faster production leads to lower production inventories as raw material inventories are reduced and production is quickly converted to finished products and shipped out of the factory.#3 Improve relationships with suppliersClose relationships with each supplier and customer will strengthen supply chain retention and aid in inventory reduction. Having a strong connection with them is a sign that the client and partner relationship is effective. Suppliers know their products best and with this strong relationship they will share their knowledge with your business. With customers, businesses can listen to their needs more, thereby making changes in products to better meet the market. This form of communication can lead to faster deliveries, fewer returns, and lower inventory.#4 Reduce order sizeOrder in smaller quantities with more frequent frequency. It helps in better cash flow management and keeps inventory levels lower. This will help businesses not be burdened with too much inventory if business operations change. Again, smart warehouse management (SWMS) can play an important role in maintaining lower production inventory levels.Watch now: <a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/news/en-what-is-warehouse-management-how-to-effectively-manage-inventory-to-avoid-76">What is warehouse management? How to effectively manage inventory to avoid losses</a>#5 Reduce inventory with accurate forecastsIf a business has a reliable tool to forecast demand, then getting rid of inventory becomes much simpler. Smart warehouse solutions (SWMS) use data from each manufacturing process to make the most accurate forecasts possible. Coupled with an efficient supply chain, manufacturing inventory software allows businesses to keep their inventory levels low with confidence.In addition, with a s<a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/services/smart-warehouse-management-system">mart warehouse management system (SWMS)</a>, businesses can set a minimum inventory level and the system will automatically signal whether the stock is less or more than the minimum inventory level. that minimum.By implementing a system that automatically recognizes when inventory needs to be replenished and identifies changes in production trends, businesses will significantly reduce the risk of excess and obsolete inventory.#6 Switch to all-purpose ingredientsDepending on the type of production, a business using flexible or interchangeable materials or components will help reduce inventory. Keeping materials in stock so they can be used in different products leads to less inventory and lower costs. If the material has a high turnover, you can order less and more often.<h3>4. Efficient inventory management with smart warehouse management system (SWMS)</h3><a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/services/smart-warehouse-management-system">Smart Warehouse Management System (SWMS)</a> allows you to effectively manage your warehouse through an automated, intelligent program. Businesses do not have to spend a lot of investment on supervisors or warehouses because the warehouse has been effectively managed.This platform allows businesses to build a minimum inventory level of each different item. When the inventory quantity exceeds (more or less) the minimum level, the system will automatically send a notification to the manager for a reasonable production policy.At the same time, the system also manages the supply process from suppliers. Businesses can create orders on the system quickly and accurately. Therefore, tracking orders to proactively produce production time is updated immediately. As a result, businesses do not need to store too many materials or goods in the warehouse.<h3>5. Functions of smart warehouse management platform (SWMS)</h3>Estuary is a leading unit in providing total business management solutions ERP, warehouse management, production… Estuary's solutions are used in a variety of business fields such as manufacturing, trading, and trading. Trade, real estate, food, garment, wood... Particularly for warehouse management software, Estuary always focuses on launching functions that are suitable for the management characteristics of businesses such as:5.1 Inventory management in an intuitive layoutEstuary's <a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/services/smart-warehouse-management-system">smart warehouse management solution</a> allows businesses to manage their goods in a clean, streamlined way for easy control and search. Each product will be set to a fixed location in the warehouse and on the enterprise's system. When employees carry out import and export, the system will suggest a location for employees to pick up or arrange goods. This saves staff time searching for goods manually. In addition, the scientific arrangement of products is also to reduce the degree of damage that affects the overall cost of the business.5.2 Mobile minimum inventory alertThis is a function directly related to the storage of goods in the warehouse and maintaining the inventory at the safest level. The system has built-in function to set minimum or maximum inventory for each product. Depending on the market demand, the level of sales, the business determines the appropriate indicators. After setting up, if you enter goods over the maximum quantity and less than the minimum quantity, the system will send a notification right on the phone. This way you can easily control the goods in the warehouse at a safe level. Avoid the case of excess goods, shortage of goods affecting the business.5.3 Update inventory data in real timeAlong with the development of the technology field, the software is now set up with real-time reports. Estuary's Smart Warehouse System (SWMS) is no exception. No matter where you are, whatever you do, but want to know the amount of inventory of each product, you only need a few operations on the system to have the most accurate data. Sales teams are going to the market to easily track inventory to be more proactive in sales. In addition, the system also has an inventory reporting interface in the form of comparisons between periods. In this way, business owners quickly get an overview and analysis to come up with a reasonable development strategy.5.4 Manage goods by multiple units, batches, dates, expiry datesIn addition to the above functions, Estuary's<a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/services/smart-warehouse-management-system"> smart warehouse solution (SWMS)</a> also helps to manage goods by many units, lots, dates, and expiry dates. Flexible cargo management will contribute to simpler operations. For example, a business that manufactures glass and packaging will need to manage materials in many different units and sizes. Food businesses need to manage goods by expiry date, in batches, in order to maintain new sources of goods, to avoid near expiration or expiration.5.5 Managing multiple warehouses, goods movement between warehousesNot only helping to manage goods on a single warehouse, <a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/services/smart-warehouse-management-system">the smart warehouse system (SWMS</a>) also allows managing multiple branch warehouses without additional costs. As a result, you can track the inventory of each store/warehouse.For example, your warehouse A has 1000 units of product M in stock. While at warehouse B, this product only has 100 units in stock. Customers in area B want to order 200 products of M. At that time, you can flexibly ship out goods of product M at warehouse A instead of warehouse B. Thus, the quantity of goods is balanced between the warehouses.5.6 Inventory management by barcode, QR codeInstead of manually checking each product, with Estuary's inventory management software, you only need to scan a barcode or QR code to have full information.Inventory is one of the reasons why businesses cannot rotate capital in time to maintain business operations at a high level of efficiency. Today many businesses have chosen to apply software-based inventory and production management methods to limit redundancies and over-stocking. Estuary's <a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/services/smart-warehouse-management-system">smart warehouse management system (SWMS)</a> is also a solution trusted by many customers to deploy today.&nbsp;For more details and advice, please contact here or via hotline 0986 79 9646.&nbsp;<a target="_blank" rel="noopener noreferrer" href="https://estuary.solutions/contact">Sign up for a free consultation here</a>

Inventory management manual in 4.0 era for all businesses

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Smart warehouse management system allows businesses to build a minimum inventory level of each different item. When the inventory quantity exceeds (more or less) the minimum level, the system will automatically send a notification to the manager for a reasonable production policy.

Inventory management manual in 4.0 era for all businesses

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