Just-in-Time Inventory Management — How JIT management can benefit home building suppliers and garden centres
It's every building supplier's and garden centre owner's worst nightmare — running out of inventory when your customers are desperate for your products. It happens more often than you would think, especially during peak seasons. When this happens, your customers will likely purchase from your competition, which can severely impact your bottom line.
While stocking up to meet customer demand may appear a safer bet, keeping too much inventory can sit around unsold for months, taking up space and eating into your working capital and profits.
For many businesses, just-in-time inventory management — ordering and receiving material close to when needed — is the answer. JIT management allows you to reduce inventory and the cost of transporting and storing goods.
Inventory control is critical, and the key to just-in-time inventory management is rigorously monitoring your use of supplies and timing replacement deliveries when they are needed.
If you're still handling inventory by hand and have manual or paper processes, you're prone to errors and inaccurate forecasts. Without data, you have no way of measuring supply and demand. The good news is that technology can help to solve these issues. This balancing act can be tricky for those new to JIT management, but hiring a third party, such as Phoenix Solutions, can help implement processes and introduce technology to ensure a seamless transition.
Numerous inventory management options are available, ranging from fully integrated Enterprise Resource Planning (ERP) systems to less expensive software products. At the very least, you need a system that can notify you when inventory levels are low so that you can replenish them.
Inventory miscounts are also common during the receiving and order fulfilment stages — even more so if you work manually. While larger companies can work to integrate their computer systems with those of their suppliers, smaller companies also need to directly monitor inventory levels at factories, distribution centres, and other locations if applicable.
If you're thinking about implementing Just-in-Time Inventory management, we have a few tips to get you along your way.
- Examine your supply chain
- Be open and honest with your customers
Build strong, long-term relationships with your suppliers. Having multiple suppliers nearby can also help reduce shipping time and costs. The goal is to work with companies you can count on to deliver on time, going above and beyond to meet a tight deadline.
Make it clear how you manage inventory and your lead-time requirements to fulfil their orders. While you might be afraid to lose a client if you cannot deliver on the spot, you will keep their loyalty if they know you have quality products and top-notch service.
Consider consulting a third party to help assess your supply chain. Just-in-time inventory management is only one step toward improving your business's operational efficiency. The team at Phoenix has an in-depth working knowledge of the industry and the know-how to implement efficient processes and eliminate waste.
We can examine all aspects of your supply chain management to maximize cash flow, optimize communication, and increase profits. Contact us for your free discovery call to learn how JIT management can elevate your building supply company, garden centre or business centre to the next level.