Optimising Inventory Turnover with Cin7 Core Integration: Techniques and Best Practices.

Optimising Inventory Turnover with Cin7 Core Integration: Techniques and Best Practices.

Inventory turnover

Inventory turnover is a business term referring to the rate at which a business sells the items in its inventory and replaces them with new items within a specific period. You can calculate your inventory turnover by dividing the total cost of the items sold in your inventory by the estimated value of your inventory in that period, otherwise known as average inventory.

A high inventory turnover rate means your business is quickly selling the items in its inventory and that you have less supply than demand. On the other hand, a low inventory turnover rate means your business is not generating many sales, so you have more supply than demand.

You do not want your business to have more supply than demand because you have too much inventory and insufficient sales and profits. To turn this around, you must implement robust inventory management techniques and practices to optimise your inventory turnover and create a healthy balance between supply and demand.

How Cin7 Core integration can optimise inventory turnover

Cin7 Core is a cloud-based inventory management solution offering unique inventory management and control solutions for all kinds of businesses. It is a multi-module inventory management programme that lets you manage your entire supply chain and scale your operations from one system. It can help you automate time-consuming tasks, whether your business is manufacturing, retail, or wholesale. It can also integrate with the Xero cloud-based accounting software to provide more financial oversight over your business’s orders, sales, productivity, and inventory.

Given all the benefits of the cloud-based inventory management programme, integrating Cin7 Core is a sure way to optimise your business’s inventory turnover. But first, you need to learn about the various ways in which integrating the programme can improve your inventory turnover.

Below are the top techniques and practices for optimising inventory turnover by integrating Cin7 Core.

1) Inventory analysis and demand forecasting

One of the greatest advantages of integrating Cin7 Core is that you can track every item in your inventory and see which items have high and low quantities. The integration streamlines the process of tracking items, orders, and sales for your business because it provides tracking information in real-time. This allows you to see which products in your inventory are running low due to increases in sales from the high demand for them.

Based on this information, you can make demand forecasts and predictions regarding how many more products you will need to obtain from your supplier to fill your inventory and satisfy consumer demand in the future. By doing this, you will never risk running out of inventory when the demand for your products is high.

Demand forecasting is also essential for budgeting purposes. Once you can informatively predict how many products you’ll need to order at a specific time, you can revise your budget accordingly to accommodate that demand. Then, you won’t end up in a situation where you run out of money in your budget to restock products in high demand.

2) Receive insights into supply chain issues

Are your suppliers shipping enough products to fill your inventory and satisfy your consumer demand? Low productivity in the supply chain can occur if one of your suppliers fails to fulfil your order requests for more inventory stock on schedule. Some suppliers may even send products that are different from the ones you need to stock in your inventory.

The inventory management software integration lets you track and manage every stage of the supply chain to ensure your supply orders are being fulfilled on schedule. You will know immediately if a particular supplier is not producing or shipping items fast enough to satisfy your inventory demands. In these situations, you will know which suppliers need replacement with more efficient suppliers capable of fulfilling your inventory demands.

3) Automatic supply reordering

You may be too busy to manually monitor your inventory and place new orders when in-demand products run low. However, with the integration of the inventory management software programme, you can automate the reordering process without needing to monitor the inventory 24/7 actively.

The automation feature coincides with the inventory tracking feature. When the integrated software detects low levels of a particular product in your inventory, it will automatically submit a new order to the supplier to send more of the product. You can set the quantity of the automated bulk order before activating automatic reordering.

On the flip side, the automation feature can also prevent the accidental reordering of products that you don’t need to restock in your inventory. Since the integrated software tracks all the different products in the inventory, it won’t place an automatic reorder if there is too much of a particular product in the inventory. This helps avoid wasting money and space on low-demand products that you don’t need to fulfil.

4) Evaluate profit margins

High inventory turnover means your profits are high and your inventory is low because you have been selling and shipping high quantities of products. However, there may be times when you sell and ship most of the products in your inventory, but your profit margins are not as high as you would like. That would mean you have low inventory turnover despite selling most of the inventory.

The integration of Cin7 Core can help you generate financial reports to discover these low-profit margins. The reports will clearly show you how many products are sold and the profits made from those sales. So, if you see a high number of sales with very little profit, you will need to adjust your product pricing to increase long-term profitability and a high inventory turnover.

Conclusion

The Cin7 Core integration is one of the best things to ever happen to business owners, especially for small and medium-sized businesses. Now, you can analyse your inventory, track orders, automatically reorder products, and evaluate profit margins to ensure your business achieves the highest inventory turnover possible.

Would you like professional assistance in optimising your company’s inventory turnover with Cin7 Core integration? Bluehub has a team of dedicated digital supply chain consultants and professionals who can use the power of this integration to streamline inventory analysis, demand forecasting, sales fulfilment, and more.

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