Reducing inventory levels is the first step toward successful inventory optimization, which has a number of advantages for your bottom line. You save on storage costs, minimize waste and free up capital. Work with your 3PL to identify solutions and cost-saving opportunities, starting with these five strategies!
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5 Ways to Reduce Warehouse Inventory Levels
1. 3PLs Help Reduce Lead Times
Ask your 3PL provider to work with you and analyze your lead times to see which parts of your supply chain processes could be made shorter to better serve your customers.
2. Improve Forecasting
Demand forecasting is another step towards successful inventory optimization. Forecasting correctly means you only receive the inventory you actually need.
3. Prioritize Stock / Eliminate Obsolete Stock
Use data from your 3PL’s inventory management system to identify slow-moving product versus the fast movers. From this, you can accurately forecast your stock to meet your demand. This also allows your 3PL to optimize warehouse space to better manage and distribute your most popular lines.
4. Review Your Suppliers Regularly
Look closely, and frequently, at your suppliers. Do they have inefficiencies that are impacting the performance of your business? Communicate with them to rectify problems or consider changing suppliers.
5. Order Fulfillment Costs
Look for a 3PL partner with a flexible rate structure for the most cost efficient solutions. Overall cost per order is based on three key factors:
• ordering [picking/ shipping]
• storage costs
Are you looking for a 3PL partner? MTE Logistix has the facilities, equipment, technology and expertise to meet virtually any need.