2 Essential Components of Inventory Optimization for E-Commerce Fulfillment Companies

Inventory optimization is one of the most important services offered by the 3rd party logistics companies in India. Inventory refers to all the finished products stored at the warehouse or other storage units that are ready for picking, packing, and shipping. Inventory optimization is one complicated process but thanks to highly advanced technical tools implemented by the order fulfillment centers in India, the operation becomes simpler with ABC analysis for prioritizing the products and through lot tracking and traceability.

3rd party logistics companies

ABC Analysis for Prioritizing the Inventory: Through ABC analysis eCommerce fulfillment companies can get a better idea of which items need to be restocked and how can the inventory be managed to tackle complex situations and the market trend. ABC analysis or the Pareto method of analyzing the inventory ranks the items in the inventory of the 3rd party logistics companies on the basis of their annual values taking into consideration the demand, supply, and total cost following the 80/20 rule. The top 20% of the goods that covers up to 80% of the total value are ranked as class A inventory by the experts at the order fulfillment centers in India, the next 15% of the inventory is categorized as class B, and the last 5 %, as class C. Through this classification, eCommerce fulfillment companies can maximize profits at the minimum shifting and inventory storage costs. The client company also can calculate which items bring in maximum returns and invest their capital likewise.


Lot Tracking and Traceability: If you notice, you will see that every item you purchase, starting from medicines to kitchen utensils, comes with a detailed product description that includes the date of manufacture, life-cycle information, and expiry dates, and even product performance data. This information can be a huge help to improve the quality of the data and is one of the most vital parts of inventory management. The eCommerce fulfillment companies can easily track and trace an individual product using the available data to make changes and keep the database updated. 

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