Question

What skill needed to be an effective inventory manager?

What are possible problems that inventory managers deal with and what are the solutions?

Explain with examples please.

Answer 1

The key responsibility of inventory manager is inventory management. In order to perform this function well the inventory manager must possess some skills. The skills needed to be an effective inventory manager are listed below:

1) Organizational and communication skills: This includes the ability to negotiate with suppliers, make profitable deals, organize supply and delivery, etc.

2) Leadership Skills: An inventory manager can also be responsible for coordinating other employees and keeping them motivated, for this purpose it is important that he/she must possess adequate leadership skills.

3) Careful Planner: A good inventory manager should be proactive, not reactive. In other words, they should be able to research the current situation with inventory, make forecasts for the future, and always have a backup plan for emergency cases.

4) Cost management skills: The inventory manager has to think not only about the costs of the products and services involved in creating stock but also the cost of the inventory as a finished product and the tax liability involved.

5) Calculation skills: The role of an inventory manager requires more in-depth calculations during the inventory planning and forecasting activities. So, it is necesaary to possess adequate calculation skills.

6) Proper knowledge of the products under purview or inventory scheduling skills: Inventory managers need to understand what they are managing. They don’t necessarily need to come with the knowledge in hand, but it certainly helps. However, a good inventory manager will always try to understand the kind of products they sell and what is involved in making them. They also should follow industry news so they can spot trends in supply and demand that might impact inventory scheduling.

An effective inventory manager enables a company to control stock levels and ultimately ensure it fulfils its customers’ needs. Accurate inventory therefore ensures wastage is minimal.

An inventory manager is required to deal with the following problems:

1) One of the problems can be related to cash management. An inventory manager wants to keep as little cash tied up in inventory as possible, while still satisfying customer demand. The solution to this problem can be having the right products in stock at the right time and making sure that you have set the appropriate reorder points for your business.

2) Problems relating to warehousing, warehouses are inefficiently managed which increases costs significantly. An inventory manager can save large sums of money by making a few changes to where they place their inventory. The items that you sell the most or send out the most should be right next to the shipping dock.

3) Lack of budget to purchase the stocks that are really needed: Determining which of your products are the real money makers is important. Develop a good set of inventory analytics which give a good view of your business performance. Efficient cash management can help to deal with this problem.

4) Problems related to overstocking, this problem can be solved by avoiding holding large quantities of inventory. Fashion and tastes change very quickly these days. Encourage your staff to keep a close eye on stock movements and try to have only the quantities in the warehouse that are required for your current needs. Keep you safety stocks as low as possible while keeping the risk of going out of stock also low.

5) Problems related with dead stock, it is important to get rid of dead stock. The important thing to remember is that you may run out of warehouse space sometime in the future. The best thing to do is to prevent accumulating dead stock in the first place.

6) Problems related to spoilage: If you handle items with expiration dates, like food or even cosmetics, they can become rotten or unusable if not sold in time. And spoiled products mean your investments go down the drain, along with your potential profits. A solid inventory management system can be your front line of defense against spoilage. You’ll have access to real-time data to know the lifecycle of your stock, and your warehouse workers can organize items to ensure older products get sold first.

7) Problems relating to the use of inventory management software, it is important to learn the underlying methodologies before handing out the software. Demand planning and inventory management software can be effectively used to manage inventory only when the inventory manager is properly trained to use such software.