Here is nature’s fun fact; a bird cannot fly efficiently without its rudder and breaks – the tail feathers and wings. Similarly, an inefficient inventory management system will have crash landing results; from huge losses, wastages, to unhappy and unsatisfied consumers. Many businesses have fallen due to poor inventory management practices. Whether your business is a start-up or already running, fear not, it won’t fall, but only if you know how to make your inventory management practices more efficient. Here’s how:
Embrace Modern Technology
Look around you, businesses are getting streamlined through applying modern technology, and inventory management isn’t any exception. Some tools might come in handy to help in managing your inventory. So, “why use Inventory Software?” You might ask. To break it down for you, and unless you favor the dark ages, it will be of paramount importance that you consider the following pointers:
- Inventory management software such as ERP will help you manage the whole inventory within a single system
- Computerize the whole inventory system to eliminate human error, improve customer service, and have real-time inventory tracking
- Use barcode scanners for efficient tracking of stock from reception and throughout the production chain
- Consider RFIDs (Radio Frequency Identification systems) that will automate your warehouse and help your large business track smart tags or RFID tags attached, especially for large quantities of inventory
- Use mobile technology by using mobile-enabled inventory management apps
If It’s Not Moving, Drop It
You might be tempted to squirrel inventory away. Unfortunately, time will devalue the stock resulting in losses and wastage. To curb this, don’t overkeep inventory especially if it is slow-moving. On the other hand, you can engage in activities such as product promotion, discounting, and couponing to get rid of the slow movers. Additionally, you will create room for fast-moving and profitable inventory.
Do It Yourself
Just like Charles Etienne said, “if you want something done right, do it yourself.” As a business owner, it’s understandable to designate duties to your employees. Unfortunately, they are human and are prone to lounging around, work slow, or get bored. These are errors that can wreak havoc on your inventory. To reduce such, why don’t you take an active role in inventory management? Why should you not take that barcode scanner and scan your inventory away? This way, you will be sure of all the information that you have.
Fortunately for you and your business, there are various inventory management approaches that you can employ. These aim at streamlining the inventory process and promote efficiency. What are some of these techniques? They include:
- Just – In – Time Manufacturing
- Safety Stock Inventory
- Lot/Batch Tracking
- Economic Order Quantity
You cannot stray when it comes to inventory when you apply these techniques. These techniques will help to eliminate issues such as wastage, overstocking, and poor customer service.
Forecast, Then Plan
You cannot order or stock inventory blindly without any past information such as sales, orders, consumer demands, and taste, just to mention but a few. Adopting an ERP system that stores such information is integral and vital in forecasting accurately. Consequently, armed with accurate forecast data, you will be able to formulate and execute feasible plans. Below are the available forecasting methods:
- Trend forecasting – This utilizes information about past sales to predict future sales
- Graphical forecasting – This is a method that uses the trend forecast data and converts it to graphical format for a better and detailed visual format
- Qualitative forecasting – This is a method that utilizes information such as the market’s economic demand due to the absence of past sales data. Mostly applied by start-ups.
- Quantitative forecasting – This is the information from past sales used to accurately predict future demands.
Proper inventory management practices not only track inventory but lifts a heavy load off your shoulders. The above tips will help you gain control of your inventory more efficiently. Having a firm and efficient inventory management foundation will steer you to your business’ bottom-line, growth, and more profits.