Stockpile inventory management is the way you keep track of everything you have in either a single warehouse or multiple warehouses. The goal of most organizations is to have enough parts, products, and other materials in their stockpile to avoid running out at critical moments while also not going overboard and hoarding too many so that they run out of room or suffer unnecessary expenses because of spoilage or obsolescence. The way to accomplish that goal and avoid those problems is by using a good inventory control method.
We have already covered a number of inventory control methods in another article, so you can feel free to check them out at the link above. They are worth going over again in a new way here because not only do they play an important role in stockpile inventory management, but they can be implemented with the aid of some advanced software features found in Fishbowl’s solutions. We will explain more about those features as we go through each of these four inventory control methods.
ABC System – The ABC System is one of the most popular ways to manage a company’s inventory stockpile. It involves grouping your goods into three distinct categories based on how often those goods are sold. The highest sellers are classified as group A, medium sellers are classified as group B, and the lowest sellers are classified as group C. This helps you know where to focus your efforts to maximize sales. The A group is clearly the one you want to stock up on the most because of its high sales velocity while group C is much less of a priority. Knowing which items fall into each category allows you to make the most of your warehouse space and cut down on carrying costs. The good news is that Fishbowl’s Part module has an Auto ABC Wizard, which automatically puts all of the items in your inventory into one of these three categories, according to their historical sales data. It’s as easy as ABC.
Min-Max System – The Min-Max System refers to the minimum and maximum quantities that apply to each item in an inventory stockpile. It prevents both shortages and overstocks because when the quantity in stock gets below a certain threshold, it triggers the reorder process, and it also ensures the number to be ordered will not put the total quantity in stock over the maximum amount. Fishbowl just so happens to have automatic reorder points that make this possible. You can assign default vendors to your parts and products so that when one of them falls below its minimum quantity, its default vendor will appear on the purchase order that is automatically generated. You can also set a specific number of goods to reorder so that it, too, will appear on the purchase order. To help you get started with this, Fishbowl offers a free Reorder Point Calculator. Just plug in an item’s lead time, safety stock, basic stock, and unit sales per day to generate the minimum number to keep on hand.
Order-Cycle System – Under an Order-Cycle System, warehouse workers go through the warehouse on a scheduled rotation and check the number of goods that are on the shelves. When they find ones that are too low, they order more. The scheduling of these counts can be whatever works best for a particular organization, whether it is once a week, biweekly, monthly, quarterly, etc. Fishbowl Go is an app that is designed for cycle counting and many other jobs involved in warehouse management. Warehouse workers can use it on a smartphone, tablet, or other designated barcode scanner to go out and perform cycle counts as often as they need to. One of the benefits of using Fishbowl Manufacturing or Fishbowl Warehouse is that it gets automatically updated after sales are made, new items are received, transfer orders are processed, and so on. So there is much less need for cycle counts to keep your inventory records accurate. However, it is still a good idea to do them on a regular basis because of human error, shrinkage, and other factors that affect the accuracy of the official numbers contained in the software.
Two-Bin System – A Two-Bin System is one in which goods are separated into a pair of bins. The first bin is meant to be used normally for daily operations and the second bin is a backup stockpile to be used only when the first one runs out and is in the process of being replenished. In Fishbowl, these two bins are referred to as basic stock and safety stock. They are one of the key elements used to determine each item’s reorder point in the Reorder Point Calculator linked to above in the section about the Min-Max System. Fishbowl gives you the ability to not only track goods by their bin numbers, but also by their designated section, aisle, and shelf in the warehouse. You are not even limited to one location. In fact, you can track goods in multiple locations to make sure each one is well stocked. That makes it so if you run out of goods at one location, you can transfer some from another location with a surplus until a fresh shipment arrives from the appropriate vendor.
You can decide which one of these inventory control methods will work best for your company, and Fishbowl will be ready to assist you when it comes time to put it into practice. Sign up for an online demo of Fishbowl to see how it can help you with your stockpile inventory management.
Fishbowl offers advanced features to make these methods of stockpile inventory management possible:
ABC System – There is an Auto ABC Wizard in Fishbowl’s Part module, which gives users the ability to automatically organize all inventory items into three main categories: high sellers, medium sellers, and low sellers.
Min-Max System – Automatic reorder points, a Reorder Point Calculator, and default vendors and quantities in Fishbowl keep parts and products within their minimum and maximum levels.
Order-Cycle System – Fishbowl Manufacturing and Fishbowl Warehouse automatically record transactions that affect inventory levels, and Fishbowl Go is an app that allows for cycle counts to ensure the accuracy of inventory records.
Two-Bin System – Basic stock and safety stock act as the two bins in Fishbowl, one for everyday use and the other as a backup while waiting for the first to be restocked. In addition, Fishbowl enables inventory tracking in multiple warehouses.