Inventory management is a systematic approach in acquiring, storing, and selling either raw materials or finished products. It ensures that you keep the correct inventory, at the proper levels, in the right places and time, and at the right price. This makes it one of the significant aspects of business’ operations. Failure to appreciate the importance of proper inventory has negatively impacted several companies’ growth, with many others ending in eventual collapse. Since no business can survive without profit in the long-run, inventory must be managed effectively, and here are four tips to help you achieve this.
Tip 1: Organize your inventory
Organizing your stock into groups can help you understand how often you need to order some stock and the right quantity. Inventory specialists have recommended separating supplies into ideal three groups: A, B, and C. Group A will contain higher-ticket products that you need less of, while Group C will include lower-cost things that turn over-over rapidly. At the same time, Group B will factor in modestly evaluated things and move out more gradually than C items, however more quickly than A items.
Tip 2: Track all item data
Make a point to track the item data for things in your stock. This data includes Stock Keeping Units, barcode or scanner tag information, suppliers, product origins, and identification numbers. You may also consider following the expenses of everything after some time to be up to date on information regarding factors that may change the cost, similar to shortage and seasonality.
Tip 3: Do regular auditing
As do some companies, there is regular comprehensive auditing. Although comprehensive auditing may occur daily, weekly, or monthly, it is usually on their sultry items. Notwithstanding how frequently you do it, it is vital to make sure your stock tallies with what you have. Thanks to technology, this is not as tedious as it was before. Regardless of this, stock can get lost, damaged, or stolen, so regular auditing should be prioritized by every business to avoid such challenges.
Tip 4: Track sales
Tracking sales involves more than summing up the sales made in a day. It is about understanding what you have sold, the quantity sold, and your stock of products available after every business day. With this, you get a better understanding of the business market you operate. This could allow you to appreciate the days and period you sell certain products, and how some products sell together. Tracking sales is broad, which can be fast-tracked using a Point of Sale (POS) system. There are several POS systems with varying functions. Adequate care must be taken in choosing a mobile POS system that fits the business to ensure efficiency and performance.
Lack of effective inventory management often leads to the locking up of capital in over-stocking, running out of stock- which may lead to missing out sales opportunities, and theft and picking errors in the warehouse. Unfortunately, all of these harms the business’ profit. These four tips should help you set the pace on the right track to effectively managing your inventory and making your business a success.