How to Control Your Inventory Holding Costs with a Mobile Inventory Management Solution

Managing inventory in a warehouse is no mean process. It lies at the heart of effective warehouse management. At its core, inventory management involves overseeing the flow of goods from suppliers to customers, ensuring optimal stock levels, and minimizing excess inventory. In today’s fast-paced business environment, leveraging technology, such as mobile inventory management solutions, is essential for achieving these objectives. However, with rising inventory holding costs, reaching optimal inventory efficiency is a herculean task, leading to inefficient inventory processes and disgruntled workforce.

This blog throws light on how inventory holding costs could negatively impact the inventory management of an organization and why a mobile warehouse management solution is the right medicine for putting a check on inventory holding costs, while optimizing the overall efficiency the warehouse operations.

Types of Inventory Holding Costs

When it comes to inventory management, holding costs are a significant consideration. These costs encompass various expenses incurred while storing and maintaining inventory. Understanding the components of inventory holding costs is key to implementing strategies for cost reduction and optimization. Some of the primary components of holding costs include:

1. Storage Costs: Expenses associated with renting or owning warehouse space, including rent, utilities, insurance, and maintenance.
2. Capital Costs: The opportunity cost of tying up capital in inventory, such as interest on loans used to finance inventory purchases.
3. Obsolescence Costs: Expenses related to inventory becoming obsolete or expired, leading to write-offs or markdowns.
4. Pilferage and Damage Costs: Losses due to theft, damage, or deterioration of inventory while in storage.
5. Opportunity Costs: The potential revenue lost from not investing capital elsewhere or from lost sales opportunities due to stockouts.

The Power of ERP Solutions

Efficient ERP systems such as Oracle or SAP are invaluable for streamlining warehouse operations and reducing holding costs. However, they often fall short in integrating front-line warehouse workers with the back office. While back-office staff can easily access up-to-date inventory data, facilitating smooth transaction processing, front-line workers face challenges due to zero access to real-time ERP data, resulting in a disconnect from the centralized system.

Thankfully, the rise of mobile inventory and warehouse management solutions has bridged this gap, granting front-line workers immediate access to ERP data anytime, anywhere. This breakthrough means that a mobile inventory management solution that seamlessly integrates with an organization’s ERP system can greatly benefit warehouse personnel, empowering them to handle transactions conveniently from their mobile devices.

Mobile Inventory Management Solution Can Help Control Holding Costs

A mobile inventory management solution integrated with an ERP system, such as Oracle or SAP, plays a pivotal role in optimizing inventory efficiency and controlling holding costs. Here’s how:

1. Real-Time Inventory Visibility

Mobile inventory management solutions provide real-time visibility into inventory levels, locations, and movements. By accessing this information on-the-go via mobile devices, warehouse staff can make informed decisions promptly, minimizing stockouts and excess inventory.

2. Improved Inventory Accuracy

By capturing data at the point of activity, mobile inventory solutions enhance inventory accuracy. This reduces discrepancies between physical and recorded inventory levels, minimizing the risk of overstocking or stockouts.

3. Effective Inventory Tracking and Traceability

With mobile inventory management, businesses can accurately track and trace inventory throughout the supply chain. This capability is crucial for identifying and addressing issues such as shrinkage, expiration, or quality control issues, thereby reducing obsolescence and damage costs.

4. Greater Supply chain visibility

A mobile solution for inventory and warehouse management provides complete visibility into the supply chain activities of a manufacturing company. By using mobile technology with barcode scanning and GPS, manufacturers can accurately monitor the movement of goods throughout the supply chain. Tracking the precise location of each item in inventory allows manufacturers to improve inventory planning by making adjustments to purchase orders, sales strategies, warehouse layouts, and more to address issues before costs escalate. Additionally, this promotes best practices in receiving, put-away, and fulfillment procedures.

5. Seamless Reporting

A reliable mobile inventory management solution should not only track inventory status and facilitate accurate data recording, but it should also offer effective reporting capabilities. For example, businesses should be able to view the turnover of specific product categories or SKUs over specific time periods. This allows them to assess depreciation costs, tax expenses, and insurance expenditures for a given quarter or financial year.

Manufacturers can generate comprehensive reports directly from the mobile solution, ensuring transparency and accountability among stakeholders. Additionally, this data enables manufacturers to strategically plan their inventory, stocking the right products in appropriate quantities for stores and warehouses. Ultimately, it empowers finance and operation managers to generate accurate inventory forecasts.

Cost Optimization

Mobile inventory management solutions contribute to cost optimization by optimizing inventory levels, reducing carrying costs, and improving cash flow. By eliminating manual processes and enhancing visibility, businesses can make data-driven decisions to minimize holding costs and maximize profitability.

Right Mobile Inventory Solution That Works for You

Propel Apps, a leading digital transformation company has developed a mobile inventory management solution that ticks all the right parameters that we have discussed above to ensure a fool-proof inventory management system for your organization. Using Propel Apps’ mobile inventory management solution for Oracle and SAP ERP, your warehouse personnel can maintain the data, automate the inventory management and sync data to the centralized ERP system. This means your up-to-date inventory data is immediately available to your desktop and mobile users, enabling faster decision-making. To know more about this solution, schedule a call with us.

Final Words

In today’s competitive business landscape, controlling and reducing inventory holding costs is essential for maintaining a lean and efficient supply chain. A mobile inventory management solution, integrated with an ERP system like Oracle or SAP, offers the tools and capabilities needed to achieve this goal. By providing real-time visibility, streamlining operations, improving accuracy, and optimizing costs, mobile inventory solutions empower businesses to enhance inventory efficiency and drive sustainable growth. Embracing technology-driven solutions is not just a choice but a necessity for staying ahead in today’s dynamic marketplace.