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What Problems Exist in Furniture Enterprise Inventory Management? How to Solve Them?

Published on: 2019-05-28

  What problems exist in inventory management for furniture enterprises, and how can they be solved? Along with the continuous improvement of China's overall national strength, the social economy has entered a period of prosperous development, and the home furnishing industry has also gained development opportunities. Furniture inventory management is a very important link in the development of Chinese enterprises. What problems have always existed in management, and how should they be solved?
Furniture Enterprise Problems Existing in Inventory Management:
  (1) Inventory management is overly simplistic.
  Most furniture enterprises adopt unified inventory management, and they are not able to effectively grasp the demand for required items and the actual supply situation. The impact of changes in market information on inventory should be considered dynamically.
 (2) Lack of consideration for uncertainty factors in inventory demand and insufficient sensitivity to market information
  These uncertainty factors mainly include demand, ordering cycles, transportation, capital, price, and cost constraints.
  (3) There is a great deal of waste in inventory

  Mainly including: inventory occupies a large proportion of working capital, resulting in high cost occupancy; untimely ordering information increases production preparation costs; untimely shortage information increases costs; and waste in packaging, loading and unloading, and transportation processes increases costs.


Inventory Management in Furniture Enterprises


  How to solve inventory management problems in furniture enterprises:
  (1) Implement ABC inventory control for stocked items.
  This control strategy classifies inventory materials according to value, using value as a reference for classification and adopting different management measures. The advantage of this strategy is that it enables key points to stand out. For example, the highest-value items (Category A) may account for only a small portion of all items, but they should receive focused management. These are important resources and require a full set of management methods such as stocktaking, inspection, and turnover pattern forecasting. Because they require relatively high capital demand, inventory levels should not be too high. Ordinary items (Category B) can adopt routine inventory management methods, and Category C items can also be managed more extensively to save personnel costs and improve the overall efficiency of inventory management.
  (2) Adopt different inventory control methods for different situations.
  For items with relatively stable usage and relatively stable procurement sources, a fixed-quantity inventory control strategy can be adopted to strictly control their quantity. Set the inventory danger value for such items according to consumption. When this level is reached, replenishment should be arranged immediately. For some less important items with independent demand characteristics, a periodic inventory strategy can be adopted by designing a stable periodic inventory control model and replenishing inventory on schedule after calculating the standard cycle. Of course, this method must also pay attention to not neglecting the setting of safety stock during calculation.
  (3) Do a good job in inventory management information analysis.

  Starting from basic data such as the specific names, categories, quantities, prices, purchase times, and storage times of inventory items, establish a complete inventory information database. This can not only effectively manage and grasp inventory conditions, but more importantly, through analysis of these data, derive various inventory management indicators, play a supervisory and promotional role in the overall inventory management work, and provide a basis for decision-making in other departments of furniture enterprises.


Inventory Management in Furniture Enterprises


  (4) Attach importance to ways of reducing inventory costs.

  Inventory certainly exists, but some inventory is not urgently needed or is infrequently used. Reducing the inventory level of such items can objectively reduce inventory costs. Through research, we believe that inventory costs can be reduced from two aspects: in-transit inventory and reserved inventory. For in-transit inventory, measures can mainly be taken from three aspects: delivery transport time, transport mode, and the location of the production site. Delivery transport time should be shortened as much as possible, which is an important way to effectively reduce costs and avoid unnecessary waste. Different means or modes of transport have different prices and timing, so the optimal cost plan for item transportation should be calculated scientifically. When time permits, lower-cost methods should be selected; when time is tight and the items are valuable, greater consideration should be given to speed and safety. In short, the selection of transportation methods should be considered holistically. The location of the production site is also very important, because bringing the place of origin closer will speed up supply time and greatly reduce circulation and inventory costs.

  Now all industries are advocating informatized management because it is convenient, fast, and labor-saving. If enterprises in the furniture industry want to solve inventory management problems in furniture enterprises, one important approach is also to use a furniture management system.Guangdong Soonfor Furniture Software Co., Ltd. has focused for more than twenty years on the development and promotion of furniture enterprise management software, management consulting, intelligent manufacturing, and intelligent marketing, providing comprehensive and mature solutions for the informatized management of home furnishing enterprises.

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