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The Importance Of A Balanced Inventory Management System

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Ordering enough inventory to meet customer demand has always been a balancing process. During slow seasons, you have to worry about a waste of capital as well as increased carrying costs. On the opposite end, not having enough inventory during busy periods could lead to backorders and manufacturing disruptions.

Balancing inventory levels will depend on the system in control that is used: push inventory or pull inventory. Push inventory management involves ordering products ahead of time, then selling their inventory to consumers. Forecasting is essential with push inventory because it requires you to estimate how much supply you need. This is typically concentrated on 6-month periods but could be up to 12 or 18 months in advance.

Pull inventory management is a type of lean manufacturing method that many organizations use today. With this technique, inventory is only purchased when there are customer orders. This manufacturing method typically includes smaller inventory orders placed more frequently because the goods spend less time sitting on warehouse shelves. The goal is to keep a minimal amount of stock on hand and the product is replaced when sold.

As new warehousing innovations enter the industry, many businesses are turning to use management software and automated systems to balance their inventory. These solutions allow for more accurate processes because it uses real-time data. With this tool, employees and logistics professionals will have a better idea of the amount of inventory being stored.

Building a balanced inventory is essential for meeting customer demand and managing warehouse operations. Make sure to keep evaluating your processes, adopt the right inventory planning model, and implement the proper tools to successfully balance inventory as well as deliver products to happy customers. Make sure to check out the infographic below for more information on the importance of a balanced inventory management system.


Infographic created by WSI


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