The Ultimate Guide to Multi-location Inventory Management

In eCommerce businesses, depending on the scale and spread of customers, the product inventory might be spread across multiple locations. The process of monitoring and controlling the inventory across multiple locations is known as multi-location inventory management. This inventory management ensures that the products are always stocked for businesses with brick-and-mortar locations. Stocking products in advance ensures that your store can always meet customer demand.
 
If you can manage your inventory effectively across multiple locations, you can improve customer service, decrease costs, and increase profits.
 

Importance of Multi-location Inventory Management

Suppose a customer orders a product and discovers it is unavailable at their local store. In that case, the customer must wait for a considerable amount of time before they can get the product they ordered. Using multi-location inventory management, you can keep track of your inventory across multiple locations. Consequently, you can ensure that you never run out of products and always meet the demand. The products and supplies are available whenever and wherever they are required.

A part of effective multi-location inventory management also includes prediction. You can analyze the peak seasons and keep your inventory well-stocked in preparation for those seasons. You will never run out of products, which makes your customers happy and leads to increased sales and more profit.

Complications of Multi-location Inventory Management

 
Managing inventory across multiple locations is not obstacle-free and comes with challenges. You do not have unlimited room to stock your inventory. So, the inventory stored should be enough to meet customer demand comfortably without flooding the storage space.
 
The following are some of the major complications that you may face during multi-location inventory management:
 

• When expanding to a new location, you cannot predict the demand. So, here comes the risk of either be over or understocked.
• Demands for certain products can suddenly increase exponentially due to a viral social media trend.
• The logistics behind moving numerous products across several locations can be challenging.
• If a supplier misses a delivery deadline, it can disbalance your entire inventory management system.
• If you provide complex products, your storage and distribution process become equally complex and challenging.
• Real-time inventory tracking across multiple locations, while ensuring that the data is always visible and the demand meets supply can be daunting.

Tips to Effectively Manage Multi-location Inventory

How can you manage your inventory across multiple locations effectively? The data must be accurate, real-time, and regular. Every business follows certain best practices to manage and maintain this inventory. Although the steps might vary across businesses, the following are the top seven best practices for effective multi-location inventory management:

• Standard Approval

When inventory has multiple locations, each location has its own process for approving product purchases and restocking. Often, these approval processes require manual intervention, thus delaying the inventory acquisition process.

To combat this issue of various approval processes, you must develop a single standardized approval process. This centralized process will ensure that the same guideline and procedure is followed across all locations. It will thus lead to a much faster approval process and avoid unnecessary delays.

• Central Inventory to Manage

When you have your inventory spread across multiple locations, the best practice is to have a central system to manage inventory across all locations. This single system will implement a more efficient overall process to streamline demand and supply.

The centralized inventory management system must have a feature to track the inventory movement on a real-time basis. It should use the barcode technology to ensure that all the movement is immediately registered in the system. Orders for the same location should be clubbed whenever possible to reduce carbon footprint and shipping costs. The warehouses where the products are stored should use their spaces optimally. Furthermore, audits should be carried out regularly to ensure the inventory management system is effective across all locations.

• Audit Inventory Regularly

Auditing the inventory regularly is a best practice for multiple reasons. These audits ensure that the products are stocked accurately. This stocking reduces the risk of ordering excess or fewer products. Audits also identify the various areas of improvement within the inventory management process to eventually correct and improve them. Conducting audits regularly ensures that the inventory is current across multiple locations, reduces wastage, and improves profits.Auditing the inventory regularly is a best practice for multiple reasons. These audits ensure that the products are stocked accurately. This stocking reduces the risk of ordering excess or fewer products. Audits also identify the various areas of improvement within the inventory management process to eventually correct and improve them. Conducting audits regularly ensures that the inventory is current across multiple locations, reduces wastage, and improves profits.

• Analyze Data, Forecast, and Plan

Suppose you invest and implement tools to effectively analyze and forecast data available. In that case, it will be easier to predict the requirement of products and stock inventory accordingly. Such accurate prediction reduces the risk of overstocking or understocking products. These tools also help predict a surge in demand based on previous patterns. Effective inventory management also ensures that products can be restocked promptly. Effective analysis, forecasting, and planning based on that data can considerably improve profits.

• Distribute Logistics Effectively

To manage logistics and distribution effectively, you must know the location and quantity of products. This knowledge helps you procure and restock products effectively whenever and wherever required. Since managing inventory across multiple locations is complex, you can install software to manage logistics and distribution effectively. Alternatively, you can outsource this job to an established and reliable third-party vendor.

• Continuous Visibility