Top inventory management strategies involve creating systems to ensure smooth supply chain movement from procurement to order fulfillment. It’s natural for bottlenecks to occur in the system. When management adopts the right processes, productivity soars. 

What Are 5 Popular Inventory Management Strategies?

The ways businesses track their inventory and order supplies has changed since COVID-19 struck the shores of America. The U.S. Census Bureau's Pulse Survey indicated around 38.8% of small business owners dealt with domestic supplier delays and plan to change the way they order. 

The only way to keep a handle on what products sell fastest and need replaced more frequently is by getting a handle on inventory and implementing some type of inventory management strategies to perfect processes.

Here are some of the more popular inventory management strategies to consider for your company. 

Strategy #1: Keep It Simple

Most businesses start small. They may keep inventory on a spreadsheet, updating at the end of the day or creating formulas to automatically mark when items are sold and reduce the number in the Excel or Google file. 

However, when it comes to inventory management strategies, this one has a lot of limitations. As your business grows, you’ll find you need something that analyzes the data and even automatically orders items for you when popular inventory runs low. 

Strategy #2: Pull

Do you sell directly to consumers? Manufacturers might find a pull strategy a successful endeavor. The idea is that you meet the demand from customers in real time and create inventory as needed.

For example, you might need more inventory at Christmas time or during holidays such as Mother’s Day and Easter. Direct to consumer models let you analyze the customer experience faster and make choices to launch products and get them to market quickly. 

Strategy #3: Push

Similar to the pull strategy, a push strategy keeps in mind customer demand for a product when choosing how much inventory to keep on hand. If you always have what you need, you can fill orders rapidly and compete with some of the bigger names in retail. 

A brand utilizing the push inventory management system would create as many products as they predicted consumers might want. Managers base their estimates on hard data and wait for the orders to arrive. Although the push strategy lowers production costs and creates a more efficient order fulfillment process, it is risky as you might wind up with extra inventory you can't sell. 

Strategy #4: Track and Replace

Current technology makes tracking inventory easier than ever before. For example, experts predict 152,200 devices will connect to the cloud every minute of the day by 2025. Included in this number are pallets of inventory with tracking RFID codes to place inventory en route to a customer or misplaced in a warehouse.

When you have a handle on where your inventory is and how much of it you have, you can program your inventory management software to automatically order popular products as your inventory runs low. 

Strategy #5: Just in Time 

The just in time (JIT) inventory management strategy strives to have the exact amount of products when consumers need them. JIT saves brands money and reduces waste. 

The problem is that any shift in supply and demand can disrupt the entire system. In early 2020, when people made a run on toilet paper, people around the country witnessed the issue with JIT inventory strategies. How well this system works for you depends on what you sell and how desperately people might need it should supplies run low.

Combine Several Inventory Management Strategies

The most efficient supply chain solutions typically pull together two or more strategies and come up with a unique system that meets the needs of the business. Consider which methods might work best for your company’s needs. You can always adjust things along the way, but it’s crucial to make changes today to improve your inventory management.