Manufacturers and distributors are under more pressure than ever before. Supply chains are more complex, customer expectations are higher, and margins are tighter. To meet increased demand, inventory management can no longer be a back-office function. It must be seen as a strategic lever.

Many manufacturers and distributors are turning to solutions that automate repetitive tasks, improve visibility, and reduce risk — and their investments are paying off. A McKinsey report found that companies with advanced supply chain capabilities can reduce costs by up to 20%.

If you’re evaluating your inventory management strategy, start with these seven high-impact moves. Each one is designed to help you reduce risk, improve visibility, and make smarter decisions, without overhauling everything at once.

1. Centralize with Inventory Management Software

Fragmented systems create blind spots. Integrating your data with a cloud-based Enterprise Resource Planning (ERP) system is essential for accurate, real-time visibility. This software centralizes inventory information, connects with other systems, and facilitates seamless data flow across departments.

With a cloud ERP, you can:

• Implement in stages, adding capabilities over time based on budget
• Avoid high upfront costs through subscription options
• Scale solutions as your business grows
• Significantly reduce inefficiencies, especially if you’re managing multiple locations or large inventory volumes

By pairing ERP with warehouse management software (WMS), you can track inventory in real-time, minimize stock discrepancies, and optimize production scheduling. This is especially useful for balancing what’s physically on the shelves with what’s recorded in the system, reducing stockouts, backorders, and excess inventory.

2. Streamline Counting Processes

Manual counts are slow and prone to errors. Incorporating mobile technology and WMS software can provide real-time updates on inventory levels. By moving away from manual processes and using tools like barcode scanners and mobile devices, you can more efficiently track inventory movement and availability.

Use a layered approach:

• Wall-to-wall inventory counts to verify system records against on-shelf quantities
• Regular cycle counts to maintain accuracy and reduce full-inventory audits
• Mobile scanners and barcode technology for greater accuracy without added complexity

Accurate counts are critical to preventing disruptions in production scheduling and ensuring orders are fulfilled without delays. When discrepancies are minimized, you can better manage stock levels and avoid costly shortages.

3. Empower Your Workforce with Mobile Technology

Mobile technology empowers employees with real-time access to inventory data.

Equipped with smartphones and tablets, employees can:

• Track inventory levels
• Update quantities
• Process orders on the go

Mobile technology can also streamline your receiving process. A well-structured receiving process with mobile technology promotes more accuracy, reduces human error, and makes the process move more quickly. Inaccurate receiving can have downstream impacts by not having proper quantities of raw materials available for production.

Employees can quickly check items upon receipt, ensuring that quantities match purchase orders and that items are stored correctly.

4. Prioritize Demand Planning

Effective demand planning is essential to maintaining optimal inventory levels. Accurate forecasts help you prepare for customer demand and adjust stock levels to avoid stockouts and overstocking.

When you connect forecasting tools with ERP data, you can:

• Spot trends early
• Adjust stock levels before issues arise
• Reduce waste and storage costs

For high-value or perishable items, precise demand planning prevents waste and minimizes storage costs. Technology tools such as WMS and ERP software offer visibility into sales patterns and customer behavior, which can refine forecasting accuracy and optimize stocking levels.

5. Assess Supplier Quality and Efficiency

Your inventory is only as reliable as your suppliers. Frequent issues with supplier quality, delivery speed, or lead times can disrupt your inventory and fulfillment processes, potentially impacting customer satisfaction.

To better evaluate suppliers, establish a scorecard system that tracks key performance indicators such as on-time delivery, quality, and cost. Regularly reviewing supplier performance helps you identify reliable partners and address issues with those who may be impacting your operations.

6. Utilize Data to Identify Inefficiencies

Data analysis can reveal insights into inventory inefficiencies and potential improvements.

Look out for patterns such as:

• Products that are consistently overstocked or understocked
• Seasonal fluctuations that aren’t reflected in your stocking strategy
• Discrepancies between system records and physical counts

Regularly reconciling inventory levels with data from your ERP system ensures that recorded counts match physical inventory. Automated data collection and structured reporting help catch discrepancies early, reducing the risk of stockouts, excessive stock, or delayed production schedules.

7. Optimize Warehouse Layout and Workflow

A well-organized warehouse and efficient workflows improve picking and stocking processes, reduce time spent moving products, and streamline operations from receiving to shipping.

With data from your ERP system, you can:

• Arrange frequently picked items closer to the packing area
• Group items frequently purchased together to minimize travel
• Create specific routes or stations for popular tasks to optimize employees’ time

Your receiving process is especially important for overall efficiency. By establishing a structured and consistent inbound workflow, you can prevent common issues like incorrect quantities or damaged parts, which often lead to costly backtracking and inventory adjustments.

Streamlining Inventory Management – A Smart Investment in Efficiency

Efficient inventory management is not a one-time fix. It involves a combination of strategic process improvements, technology adoption, and data-driven insights.

By implementing these strategies, you can reduce costs, improve stock accuracy, and enhance customer satisfaction. For the best results, adopt changes in phases and focus on areas where immediate benefits align with your long-term inventory goals.