Storing inventory costs a lot more than the product itself. Why? Because it involves carrying costs like utilities, rent, insurance, and payroll—it can result in 25 percent to 55 percent of the inventory value.
So, you need to use good inventory management software that helps you stock and replenish inventory.
Min/Max Inventory Management
The simplest and most popular method of inventory control is the min/max method which attempts to keep on-hand inventory within a specified range. A minimum stocking level is set, which, when hit, triggers a reorder to reach the max stocking level of the item.
Min/max methods can optimize inventory, and the calculation is basic: the difference between the maximum and the current inventory.
When to Implement It?
The min/max inventory method is ideal for new items with no prior data history or fast-moving. However, managing this with just an ERP system may result in over or understocked products.
Using an automated inventory management software system like AltheaSuite provides businesses with an excellent solution to track inventory, manage on-hand quantities, and more. The software also defines sales figures and hierarchies and provides data analytics to set up future offers and purchases.
Benefits of Min/Max Inventory
This approach leads to significant benefits for companies that operate across multiple industries. These include:
· Reduced downtime and maintenance backlog, hence higher efficiency
· Avoiding overstocking leads to better inventory planning and scheduling
· Being able to negotiate better rates by having a forecast on quantities
· Reduced human error through automation
Industries that Benefit from Min/Max Include:
· Healthcare: for medical centers, the min/max method ensures they can replenish critical supplies as needed.
· Manufacturers: With min/max, manufacturers can optimize their indirect inventories
· EMS: ensures that critical supplies are never short in their locations
· Contractors get real-time visibility into all locations storing the inventory, so they have what they need whenever they need it.
· Distributors: with min/max distributors, ensure that they aren’t understocking or overstocking their inventory.
AltheaSuite — The Inventory Management Solution for All Businesses
Are you looking for the best inventory management software for your business? Check out AltheaSuite today. We provide complete manufacturing and inventory management where you can maintain inventory at multiple locations, prevent stock-outs, generate barcodes, integrate with e-commerce platforms, and more. Our multi-channel warehouse management is all that your business needs.