You can have fewer finished products in stock and not suffer any decrease in your level of customer service. That’s the lesson to learn from the data compiled in the Finished Goods Inventory Management Report by Tompkins Supply Chain Consortium. You can read about it in this article: “Finished Good Inventories Fall, Order Fill Rates Rise.”
In response to the recession in 2009, manufacturing and retail companies significantly cut their inventory levels to save money. It might seem counterintuitive, but this reduction didn’t affect their ability to fill customer orders in a timely manner.
How is this possible? Because the manufacturers and retailers didn’t just cut inventories as a knee-jerk reaction to lower sales; they made strategic cuts that helped them save on carrying costs while keeping enough on hand to meet demand. Now that’s smart.
The top three reasons why manufacturers and retailers cut their inventory levels in 2009 are:
1. (tie) Smarter planning – 21.1%
1. (tie) Drop in sales – 21.1%
3. Management focus – 19.7%
Two of the top three reasons involve smart decision making. QuickBooks manufacturing software can play a big part in making smart inventory decisions. With QuickBooks manufacturing software, businesses can accurately plan for jumps and drops in consumer demand.
Having too many products on hand is just as bad as not having enough. That’s why QuickBooks manufacturing software helps companies maintain a balance. Managers can find out exactly how much inventory they have on hand in real time using inventory barcode software and barcode scanners.
If you would like to start using the #1-requested QuickBooks manufacturing software, try a free trial of Fishbowl today.