Solve Your Top Inventory Challenges with NetSuite Inventory Management
Working with growing wholesale distributors, we’ve seen the same situation over and again – companies start out using a simple inventory management system and everything is working well. They know what inventory they have, are keeping up with customer demand and sales are strong. Then they start to grow. They add new products, expand their customer base, maybe add another warehouse. And suddenly they’re in a mess. Inventory counts in the system don’t match what’s in the warehouse, they’re expediting orders regularly due to stock-outs and their customers aren’t impressed. Not an ideal scenario, but it’s common.
The problem is that their systems haven’t kept pace with their growth. Inventory management software can only take you so far. Then it’s time to upgrade to an ERP solution. NetSuite is the leading cloud ERP software supporting distributors across all industries. From a functionality standpoint, it can do a lot for your business. For simplicity, let’s look at how NetSuite addresses the top three inventory challenges distributors face.
1. Reduce stock-outs
Stock-outs are your worst nightmare. You have a customer that wants to buy from you…and they can’t because you don’t have the product in-stock. To avoid missing out on the sale, you’re fast-tracking the order and possibly paying higher cost for that service. For some companies, this is an everyday occurrence.
Using reorder points as the replenishment method, NetSuite will automatically create a purchase order to restore inventory to your preferred stock level once inventory falls below the reorder point. To further optimize your inventory levels, the system will consider historical data like sales demand, supplier lead times and your defined safety stock levels. While basic inventory software will offer re-order points, NetSuite gives you an added level of sophistication in your planning to reduce stock-outs up to 80%.
2. Lower inventory holding costs
Inventory is your most important asset – but it’s also your biggest cost. The more inventory sitting in the warehouse, the higher your carrying costs will be. As we’ve touched on, NetSuite helps you optimize your inventory levels based on demand, so you have the right amount of the right product at the right time. But it doesn’t end there. NetSuite accommodates drop shipping, so you can coordinate the purchase and shipment of a product direct from your supplier to your customer without it ever touching inventory. You can also process special orders, where the system generates a purchase order as soon as a sales order is approved so you don’t need to hold the inventory until a sale is made. Each of these strategies is impactful on their own, but when combined, you can lower inventory costs up to 30%.
3. Improve inventory tracking and traceability
Having an organized warehouse where your team knows exactly where to find each item is critical to maintaining peak efficiency. NetSuite gives you a complete view of inventory levels across multiple warehouses, sub-locations and bins. You have the flexibility to track items by lot or serial number, with system rules to enforce capture of all related information on each transaction. Combined with regular alerts to perform cycle counts, the result is greater control and visibility into your inventory.
Ready to learn more about NetSuite inventory management?
If the inventory management benefits aren’t proof enough, here’s what NetSuite can do across the rest of the business:
10% increase in revenue performance
5% boost in gross margin
55% reduction in time to close the books
As your Canadian NetSuite implementation partner, we're here to guide you on your ERP journey. Let's chat about your business goals and see how we can help you get where you're headed.