Inventory-based businesses (e.g., warehouses, manufacturers, etc.) are grappling with a tsunami of challenges. From controlling labor costs, leveraging emerging technology, and navigating the ever-increasing pool of regulatory requirements to establishing solidarity in the globalized supply chain, the convergence of Industry 4.0 and Globalization 4.0 is creating a mountain of nuanced frictions that require time, attention, and energy. But, beyond the veil of this pressure valve of problems, everything comes back to liquidity and cash flow. And cash flow always comes back to inventory.
There’s a strange dichotomy of priorities and investment in inventory-based businesses. Despite investing a massive $745 billion in IoT and billions more in robotics, a shocking 43% of small and mid-market companies have no formal inventory management solution. That’s a big problem. Even if we ignore the fact that up to 7% of the global GDP is tied up in inventory, having inefficient inventory processes creates a steady stream of revenue leakage that saps the value out of every other investment you make.
Luckily, you have options. Despite Oracle often being associated with enterprise-scale companies, NetSuite Warehouse and Fulfillment — Oracle’s Warehouse Management System (WMS) — brings tangible value to mid-market inventory-based businesses, allowing them to streamline inventory management.
The Inventory Problem
Inventory management is the single most important component of a profit-bearing inventory strategy. To be clear, most inventory-based businesses fail at handling the management of their inventory lifecycle. 34 percent of businesses semi-regularly ship orders late due to selling out-of-stock products. But it’s not the act of overselling that’s sinking businesses; it’s overstocking. As of June 2019, the average retailer is sitting on $1.36 in inventory for every $1 in sales. Unfortunately, many of those goods are unnecessary, and they simply exist as overstock due to poor safety stock management and an inaccurate understanding of stocking levels.
Worldwide, the overall cost of inventory distortion (e.g., stockouts, overstock, shrinkage, etc.) stands at over $1.1 trillion. In other words, inventory management directly ties into operational liquidity, and every percentage change in inventory distortion can generate profits or create significant revenue leakage. Inventory planning is facilitated by technology. If your business wants world-class inventory management, you need best-of-breed tech. Don’t worry; you’re not short of options. There are plenty of inventory management solutions — like Oracle’s NetSuite. If you’re ready to deep dive into inventory planning with Netsuite, we’ve got you covered.
Inventory Planning with Netsuite: GUIDE
How NetSuite WMS Can Help With Inventory Management
Like most Warehouse Management Systems (WMS) or ERPs, NetSuite bundles a ton of features under the umbrella of their solution. So unpacking all of their features can be a time-consuming and complicated process. That being said, let’s focus specifically on how NetSuite intersects inventory management. Again, NetSuite also offers financial management, supply chain management, procurements, and a variety of other services aimed at maximizing efficiencies and decreasing tech TCO.
To help clarify exactly how NetSuite intersects inventory management, here are some inventory-centric features:
- Inventory counts: NetSuite has a built-in inventory count feature. Again, this is super-simple to use. You set up some basic parameters, and this feature will automatically alert you when inventory needs to be counted. This is critical. You still need boots-on-the-ground manual counts. NetSuite just helps you know what, when, and where to perform these counts to save you time and headaches.
- Multi-location inventory management: One of the biggest draws of NetSuite compared to other similar solutions (which there are plenty of) is how they handle multi-location management. You can quickly set up a hierarchical definition of your core locations, but you can also create sub-location bins underneath each location. So, let’s say that each of your warehouses has a few different areas (e.g., damaged goods, cross-dock, etc.) NetSuite lets you define those and store items in any of those sub-locations. This gives you a crystal-clear view of exactly where your goods are located. Here’s a picture of what this looks like in action.
- Tracking: This feature is semi-standard across inventory management solutions, but it’s important nonetheless. NetSuite lets you push inventory to lots or serial numbers and track that inventory using those definitions. Again, this gives you extra traceability, allowing you to identify any frictions in the inventory lifecycle. Additionally, you can use this to track expiration dates and shelf life to prevent shrinkage and feed inventory data back into sales and shipping tactics.
NetSuite + StockIQ = Easy Inventory Management
NetSuite provides solid basic inventory management features. However, seasoned supply chain professionals know that you can take inventory optimization to the next level by incorporating inventory focused business intelligence, advanced forecasting, and automated replenishment suggestions into your inventory management practice.
StockIQ makes it easy to manage your inventory with several key features like:
- Alert based planning keeps you ahead of the game by calling out issues that help you manage by exception.
- Graphical forecast view makes forecasts easy to visualize and manage.
- Reporting that supports SIOP practices.
- The StockIQ Order Planner makes order management easy by using a smart and efficient user interface. Purchase orders can be placed in just a few clicks.
NetSuite: Beyond the Inventory
Of course, inventory management is only one component of NetSuite’s WMS. There are QA features, automated PO workflows, container tracking capabilities, mobile capabilities, and plenty more. Additionally, the WMS is only one component of NetSuite’s ERP — which can include tools to handle activities like:
- Finance & operations
- Billing
- Revenue
- Production Management
- Order Management
- Supply Chain Management
- Procurement
- HR
- Payroll
- and plenty more.
We know! It’s a lot to take in. Considering the abundant number of tools you have at your fingertips, trying to plan around inventory management can seem like a headache. You don’t want to add new, siloed tools to your stack, but you also don’t want to transition to new solutions. So, you have two choices. You can either completely onboard NetSuite’s ERP, or you can simply utilize the WMS. Either way, NetSuite represents a tangible way to create an ecosystem of semi-automated inventory management.
Inventory Management Should Be Your First Investment
As an inventory-based business, your cash flow issues start and stop with inventory. Taking control of your inventory helps you cut costs, eliminate redundancies, and create holistic inventory ecosystems. Your first investment should be inventory management.
At StockIQ, we help inventory-based businesses make the most out of their ERP solutions. Not only does StockIQ add new layers of value to your inventory management capabilities, but our solution seamlessly integrates with NetSuite, Epicor, 3PL, QuickBooks, Microsoft ERPs, and even legacy systems. With StockIQ, you get advanced inventory planning dashboards to track critical data like stock outs, dead stock, service levels, turns, safety stock levels, economic inventory, and more.
Are you ready to take your inventory planning to the next level? Contact us.
