How can you make your inventory control data-driven?

1 Define your inventory goals

The first step to make your inventory control data-driven is to define your inventory goals. These are the specific, measurable, achievable, relevant, and time-bound (SMART) objectives that you want to achieve with your inventory management. For example, you may want to reduce inventory holding costs, increase inventory turnover, or maintain a certain service level. Your inventory goals should align with your business strategy and customer expectations.

2 Collect and organize your inventory data

The second step to make your inventory control data-driven is to collect and organize your inventory data. This is the information that you need to measure and monitor your inventory performance and make informed decisions. You may use different sources and methods to collect your inventory data, such as barcode scanners, RFID tags, inventory management software, or manual records. You should organize your inventory data in a way that is easy to access, analyze, and update. For example, you may use a spreadsheet, a database, or a dashboard.

4 Implement data-driven inventory policies

The fourth step to make your inventory control data-driven is to implement data-driven inventory policies. These are the rules and guidelines that you use to manage your inventory operations and activities. They should be based on your inventory goals and data analysis, and reflect the best practices and standards for your industry and market. For example, you may use a data-driven inventory policy to determine how much and when to order, how to allocate and replenish your inventory, or how to handle inventory discrepancies.

5 Monitor and evaluate your inventory performance

The fifth step to make your inventory control data-driven is to monitor and evaluate your inventory performance. This is the process of tracking and assessing how well your inventory management is achieving your inventory goals and meeting your customer needs. You should use key performance indicators (KPIs) to measure and compare your inventory performance over time and against benchmarks. For example, you may use KPIs such as inventory accuracy, fill rate, or stockout frequency.

6 Adjust and improve your inventory control

The sixth and final step to make your inventory control data-driven is to adjust and improve your inventory control. This is the process of making changes and enhancements to your inventory management based on your inventory performance and feedback. You should use a continuous improvement cycle to identify and implement opportunities for improvement and innovation. For example, you may use a plan-do-check-act (PDCA) cycle to test and refine your inventory policies and practices.