The inventory manager is a vital role within a retail operation, eCommerce or wholesale business. They oversee and provide accurate data on available products to make informed decisions on supply chain management and sales. Quite the responsibility!

Some of the inventory manager’s responsibilities include managing:

  • The cost and sources of product acquisition;
  • The warehousing of that product; 
  • The amount and value of product on hand.

Inventory managers walk a tightrope daily. They need to ensure there’s enough available product or merchandise to meet customer demand while not having too much, which would incur additional costs. 

Let’s look at five key functions of the inventory manager and how they contribute to the success of a retail, eCommerce or wholesale operation. 


#1 - Evaluate Suppliers

Who are you getting product from?

Product acquisition is the first step in the supply chain and therefore, a big part of the inventory manager’s role. They are responsible for: 

  • Ordering products;
  • Ensuring the correct product is received;
  • Establishing and maintaining supplier relationships;
  • Managing order delays and other problems.

Inventory managers need to be aware of other available suppliers, who may be cheaper and/or more efficient with order fulfillment. Having more options can help a company change vendors or renegotiate costs and terms with an existing supplier.

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#2 - Prepare Documentation and Reports

How are you sharing your insights? 

Because inventory managers know so much about the flow of products, they’re also responsible for sharing that information with others. The documentation they provide should include: 

  • Product details (name, type, style, model number, etc.)
  • Inventory levels (quantity available, pending orders, expected shipments, etc.) 
  • Inventory value (how much is current stock worth) 

This documentation can help with tracking theft or loss due to damage, planning future sales promotions, and making decisions on what products are or are not selling as expected.

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#3 - Purchase New Inventory

Who’s responsible for product acquisition? 

Smaller companies rely on the inventory manager to negotiate supplier contracts and place orders. Doing so means: 

  • Knowing what products are needed, when and in what quantities
  • Understanding what sales and promotions are happening and adjusting as needed
  • Adjusting orders based on having too little or too much inventory on hand

Making those purchases requires detailed, accurate knowledge of inventory levels as well as effective channels of communication with vendors.

Related blogLearn the ABCs of inventory management

#4 - Forecast Inventory Needs

How much will you need to meet tomorrow’s demand? 

With so much data on their hands, inventory managers are expected to place orders that accurately anticipate future demand. They do that by: 

  • Using tracking systems to identify trends; 
  • Anticipate sales and promotions to bring on extra or different inventory;
  • Understand which products are most in-demand, by whom, and when they’ll be needed.

By making accurate forecasts and placing accurate orders, inventory managers reduce costs and make sure products on hand are the ones most in-demand.

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Related blog: What is Inventory Forecasting?

#5 - Reduce Inventory Costs

How much does it cost to store products before they’re sold? 

Inventory managers play a major role in the cost effectiveness of an organization. They help reduce costs by: 

  • Purchasing only inventory most likely to sell;
  • Storing only what’s needed for as little time as possible;
  • Managing transportation costs – from the supplier and to the customer;
  • Suggesting sales or promotions to get old products off shelves.

Because they’re exposed to all aspects of the supply chain, inventory managers are uniquely positioned to reduce operational costs and save businesses money. pillar-page-inventory-management-thumbnail2

Related blog: Inventory Analysis: Ratios to Improve Performance

Teams, Tools and Resources

To accomplish all of this, the inventory manager need adequate resources of all kinds. 

  • A tracking system: This can range from pencil and paper to sophisticated enterprise software. Many small businesses use Excel or Google Sheets before needing to upgrade.

  • A support team: Startups may not be able to afford a big team. But as your business grows, it’s important to add supporting roles to deal with data analysis and other aspects. 

Related blog: Benefits of Inventory Management Apps, Software, and Systems

The obligations of any inventory manager span across specific inventory duties to managerial tasks. An effective inventory manager understands their role within an organization and the measurable impact they make. 

Without them, a small or midsize business or retailer won’t have the level of understanding of their customers or products that’s necessary to compete and stay relevant. 

That’s why it’s vital the inventory manager have the right information, tools and resources to do their job well, and the skills to use the insights at their disposal effectively. They could make or break a company’s bottomline.

     

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