Effective inventory management is pivotal for the success of your business in Singapore. The reality is that excess inventory can immobilise a significant amount of capital – capital that could be invested in expanding your product range, enhancing your sales and marketing efforts, or other growth opportunities.

Here’s why perfecting your inventory management is essential for scaling your business in Singapore, along with eight practical tips to refine your wholesale distribution operations.

1. Establish Minimum Stock Levels

Are you aware of when your stock levels are depleting? Do you have a system in place to prompt reordering? Simplify inventory management by setting “minimum stock levels” for each product. This is the least quantity you should always have in stock.

Configure your inventory management system to alert you when stock falls below this threshold, prompting a reorder. While it takes some initial effort to determine these levels, it will streamline your ordering process, enabling quicker decision-making and empowering your team to act on your behalf.

Bonus tip: A robust SME inventory management software can automate the setting of minimum levels by analysing your past sales data and seasonal trends to suggest optimal stock quantities.

2. First-In, First-Out (FIFO)

The “First-in, first-out” principle is a cornerstone of inventory management. It ensures that the oldest stock is sold first, not the newest. This is crucial for perishables and a best practice for non-perishables to prevent items from becoming outdated or damaged.

Bonus tip: FIFO requires an orderly warehouse. Train your staff to place new items at the back, keeping older stock accessible at the front.

3. Nurture Supplier Relationships

Your supplier relationships are integral to nimble inventory management, especially when adapting to Singapore’s dynamic market demands. Negotiate terms such as lower minimum orders or bulk purchase discounts – suppliers in Singapore often appreciate large orders and accurate purchase forecasts.

Bonus tip: Maintain a two-way communication channel with suppliers. Use a small business ERP to stay updated on order statuses and potential delays.

4. Contingency Planning

In the logistics-heavy wholesale distribution sector, issues are inevitable. Whether it’s an unexpected sales surge, cash flow challenges before peak seasons like Chinese New Year, or product shortages, you must have a contingency plan ready.

Bonus tip: Diversify your suppliers and product lines to mitigate risks.

5. Regular Auditing

Consistent reconciliation is crucial. You can conduct a full physical stocktake, spot checks for high-risk items, or cycle counting on a rotating basis.

Physical Stocktake: This means counting all your inventory at once, usually once a year. This can be disruptive and time consuming. And, it can be difficult to pinpoint discrepancies when you’re looking back at an entire year. Consider buying or renting a stocktake scanning solution to speed things up.

Spot Checking: Spot checking throughout the year can supplement a big annual stocktake. This simply means choosing a product or area in your warehouse, counting it, and comparing the number to what it’s supposed to be. It’s great for problematic or fast-moving products.

Cycle Counting: Instead of doing a full physical stocktake, some businesses use cycle counting to audit their inventory. Each day, week, or month a different product is checked on a rotating schedule.

6. Prioritise Your Inventory

Use ABC analysis to categorise your stock based on value and sales frequency, focusing your efforts where they’re needed most.

Go through your product list and add each product to one of three categories:

• High-value products typically with a low frequency of sales: requires high attention.
• Moderate value products typically with a moderate frequency of sales: requires medium attention.
• Low-value products typically with a high frequency of sales: requires low attention.

7. Align Demand with Supplier Lead Times

Accurately forecasting demand and aligning it with supplier lead times is a delicate but essential aspect of inventory management.

8. Integrate Your Financials

Ensure your inventory management software updates your financial records automatically, avoiding double entries and keeping your accounts accurate.

Bonus tip: A cloud-based ERP solution for SMEs can streamline your entire operation, providing a unified view of sales, stock levels and financials.

Ready to enhance your inventory management in Singapore? Implement these strategies to save time and money, and see how our inventory management software can help you grow your business. Contact us to start a conversation today.

For more insights, check out our comprehensive guide, The Ultimate Guide to Inventory Management, for additional strategies to improve your warehouse efficiency and profitability in Singapore.