RSM Resources

Most businesses face more competition today than ever before. This competition often results in pressures on profit margins. At the same time, customers are demanding their suppliers provide more value-added services and better product availability in order to retain their business. Distributors, manufacturers and retailers are placed in the difficult position of having to provide these additional offerings with fewer profit dollars, making it critical that every dollar invested in inventory helps to achieve the goal of effective inventory management:

Effective inventory management enables an organization to meet or exceed customers’ expectations of product availability with the amount of each item that will maximize its net profits.

In this article, we will examine two best practices you can implement to achieve this goal: developing your approved stock list and fine-tuning your safety stock quantities. These concepts are fairly easy to implement and can lead to significant profitability and productivity improvements of your inventory investment.

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