How do you keep your inventory policies up-to-date?

1 Why update inventory policies?

Inventory policies are not static and should be updated regularly to stay in line with changes in the market, demand, supply chain, and business goals. Doing so can help improve your inventory turnover ratio, reduce inventory holding costs, increase service level, and enhance inventory accuracy. All of these benefits can help you optimize your inventory management and ensure that you are meeting customer needs.

2 How to use inventory management KPIs?

Inventory management KPIs are metrics used to measure and evaluate inventory performance, which can help identify gaps, issues, and opportunities in inventory policies. Common KPIs include the inventory turnover ratio (number of times inventory is sold and replaced in a given period), inventory holding cost (total cost of owning and storing inventory), service level (percentage of orders that can be fulfilled without stockouts or backorders), and inventory accuracy (percentage of accurate records that match physical inventory). To use these KPIs to update your inventory policies, you must define target values based on business objectives and benchmarks, track and monitor actual values using an inventory management system or software, compare actual values with target values to analyze any deviations or gaps, and adjust policies accordingly to improve KPIs and align them with target values.

3 How to get feedback?

Feedback is a valuable source of information that can help you update your inventory policies. You can get feedback from customers, suppliers, and employees. To do this, you need to establish clear and frequent communication channels with your feedback sources, such as surveys, interviews, reviews, or meetings. You should also collect and organize the feedback data using an inventory management system or software. After analyzing the data to identify key themes, patterns, and insights that relate to your inventory policies, you can then implement the feedback recommendations that can improve your inventory performance, customer satisfaction, and supplier relationships.

4 How to follow best practices?

Best practices can help you optimize your inventory management and avoid common pitfalls and errors. Forecasting demand, classifying inventory, reordering inventory, and controlling inventory are all important best practices for inventory management. To ensure you are following best practices for your industry, product type, and market segment, you should research and benchmark the best practices. Then evaluate and compare your current inventory policies with the best practices to identify any gaps or areas for improvement. After adopting and adapting the best practices that suit your business needs and goals, implement them in your inventory policies and procedures. Finally, review and measure the results and impacts of the best practices to ensure they are having a positive effect on your inventory performance and customer satisfaction.

5 How to update inventory policies?

Updating your inventory policies is not a one-time event, but rather an ongoing process that requires regular review and revision. To ensure effective updates, you should set a schedule and frequency for updating your inventory policies, assign roles and responsibilities for updating them, document and communicate your inventory policies clearly and consistently, and test and monitor your inventory policies and their outcomes. This could involve using an inventory management system or software, a feedback system, or a KPI system.