7 Steps to Implementing the Right Inventory Optimization System

When it comes to implementing the right inventory optimization system for your business it's important to understand your inventory needs and the benefits of having an integrated system prior to starting the selection process.

Whether your goal is to optimize your inventory operations for the first time or to upgrade to a more robust system, this blog post is an ideal resource for finding the right system – including information on how to build an effective project team, ask the right questions of your software reseller and successfully implement the system.

1. Evaluate your current system

   • To get the most out of your new inventory optimization system, you need to do more than simply add technology to your current processes. The more you know about the problems you expect the new system to solve, the more successful your final choice will be. Discuss what modifications need to be made to current system procedures. What works? What doesn’t? Consider not only how technology can automate current processes, but also examine other ways they can be improved. Encourage your team members to be candid about what they find frustrating, redundant or ineffective. Examine how your warehouse interacts with customers, suppliers and your organization’s departments; look for weaknesses and ways to improve these communications.

2. Share your expectations

   • Once you’ve agreed on the process and the time line, have each member of your team share their expectations for the new system. Conduct a session to brainstorm ways the existing system can be improved, including new functions and processes that aren’t currently in place.

3. Agree on your needs

   • Have each team member create a list of key functions they feel the new system needs to provide for the company. Then have them prioritize these items as Essential, Greatly Desired or Would Be Nice. Encourage team members to differentiate between functions they want and functions they definitely need. Achieve a general consensus within the team defining the rank of each function and then combine those items into a prioritized list.

4. Create your list of required functions

   • Once you have consensus, refine your mandatory requirements into a formal Required Functions List. Your Required Functions List should be a short, one to two page prioritized list that includes all of your must-have functions. This list of mandatory features will help you quickly eliminate systems that don’t meet your needs.

5. Consider the benefits of back-office integration

   • Selecting inventory optimization software that integrates with your accounting system ensures complete control and flow of information between your back-office and warehouse floor. An integrated system can automatically transfer data from your inventory to your accounting database, eliminating manual intervention and transcription errors while providing accurate and up-to-date inventory control. Look for a smooth-running system that can easily and reliably interface with your financial data – supplying in-depth information across the enterprise. Just as important, an integrated system will support your Web order and EDI needs, and send back Advance Ship Notices (ASNs) to notify vendors of incoming shipments.

6. Don’t forget about hard-to-quantify benefits

   • The right inventory optimization system maximizes the productivity of your warehouse staff. It frees them from tedious, time-consuming tasks and allows them to focus energy on picking the right items the first time, every time. It allows your company to benefit from increased inventory-handling accuracy and reduced carrying costs associated with obsolete and slow-moving stock.

7. Avoid RFPs

   • Contrary to what your colleagues may tell you, the next step is not to create and send out a Request for Proposal (RFP) to resellers you are considering. Creating an RFP, sending it out, waiting for proposals and reviewing them can take months. You can achieve the same results in days by asking potential resellers if their system provides the key functions you require. Obviously, if your company requires you to use an RFP, this step is necessary.