5 Ways to Manage Inventory using Customer Consignments

These days, every company is looking to maximize revenue while reducing costs. In many companies, this is difficult because that reduction in cost often results in less inventory in stock. This reduction may be achieved by only purchasing inventory when there are sales for the items, or by downsizing warehouses. Plus, having less inventory in stock could also mean a decrease in customer satisfaction.

Introducing Customer Consignments

Many companies have addressed this issue by shipping items to their customers on consignment. Typically, this means the customer takes possession of the items, and once sold to their customer or consumed by them, they receive an invoice, and then additional inventory is sent to replenish what was sold. After a certain period, the items are returned to the consignor and placed back into their inventory.

This can be a great way to increase sales and reach new customers, but it can also lead to problems with inventory management.

Easily Manage Inventory at Your Customer Locations using Customer Consignments

How can you easily manage inventory at your customer locations using customer consignments? Here are 5 ways:

1. Use Technology - One of the most effective ways to manage inventory at customer locations is to use technology. There are many software solutions available that can help you track inventory levels, monitor sales, and automatically reorder products as needed. With the right software, you can easily see how much inventory is on hand at each customer location and quickly identify any discrepancies.
2. Set up a reporting system - Setting up a reporting system is another important step in managing customer consignment inventory. This could involve using a spreadsheet or software that tracks sales and inventory levels at each customer location. The reporting system should be easy to use and updated regularly to ensure accuracy.
3. Communicate with your customers - Effective communication is key when managing customer consignment inventory. It's important to stay in touch with your customers and ensure that they are aware of your inventory levels and sales goals. This can help you identify any problems early on and make adjustments as needed.
4. Establish clear guidelines - Establishing clear guidelines is another important aspect of managing customer consignment inventory. This could include guidelines for ordering, stocking, and selling products, as well as guidelines for reporting sales and inventory levels. By having clear guidelines in place, you can help ensure that your customers are following the same process and working towards the same goals.
5. Regularly monitor inventory levels - It's important to regularly monitor inventory levels at each customer location. This could involve using software to track sales and inventory levels, as well as conducting regular physical inspections of the inventory. Regular monitoring can help you identify any problems early on and make adjustments as needed.

One of the most effective ways to manage inventory at customer locations is to use technology. There are software solutions available that can:

• help you track inventory levels
• monitor sales
• automatically reorder products as needed

With the right software, you can easily see how much inventory is on hand at each customer location and quickly identify any discrepancies.

Customer Consignments for Dynamics GP

By using Blue Moon’s Customer Consignment module, the initial shipment or replenishment shipment of the items is done using standard Dynamics GP Sales Transaction Entry. However, the amount on the customer’s invoice is zero, and, behind the scenes, a transfer is performed to move the items from the shipping warehouse (consignor) to the customer’s (consignee) warehouse (a Dynamics GP site ID that may be customer-specific).

The inventory is still owned by the consignor but can be managed, tracked, and even confirmed by an inventory count at the customer’s location.  This will also keep the auditors happy.

Once the items are sold, an invoice is created with the customer’s pricing on it, relieving the inventory from the customer’s site. In cases where a salesperson visits the customer to take the inventory and generate the invoice, or in cases where the desire is to have a self-service environment, jLAN Mobile (priced and sold separately) may be used to generate the invoice and submit it directly into Dynamics GP.

If the items are instead returned back to the consignor, the Sales Return document is processed, which, like the initial shipment, is priced at zero dollars, and facilitates the transfer back from the customer’s site to the consignor’s site.

Replenishments to the consigned inventory are processed in the same fashion as the original shipment. Sales volumes and trends for this customer can be easily tracked using the existing Dynamics GP tools, providing an easy method to suggest new products, rotate stock, and monitor any discrepancies.

In conclusion, customer consignment can be a great way to increase sales and reach new customers, but it can also lead to problems with inventory management. With these tips, you can ensure that your customer consignment process runs smoothly while helping you reach your sales goals.

Contact our Channel Management team for more information about Customer Consignments!

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