Working in procurement means handling responsibilities that cover both different and related tasks. A complicated aspect of these tasks is the supply chain, where you have the inventory management process. Notably, the approach you take in recording, tracking, and managing your inventory can have a significant impact on your critical business processes. Every aspect can either deplete or enhance your business, depending on how you manage it.
Therefore, an effective inventory management process is very important for the success of your business. Luckily, working to create a detailed understanding of your inventory management process and applying the right techniques can optimize your inventory processes for productivity, efficiency, and profitability.
Steps of an inventory management process
Receive delivery
These goods can include raw materials for manufacturers, finished goods for resale, and indirect materials to provide support for the daily operation of a business.
Review, sort, store goods
In the review process, goods are checked, sorted, and stored on shelves. For small businesses, they might not have a separate receiving department compared to big companies. However, you can use the warehouse as a place to sort and store goods. Furthermore, it is essential to assign goods with unique stock-keeping unit codes and tag with barcodes to track them easily.
Monitor and update inventory level
Under this process, inventory levels are consistently monitored, with physical counts conducted occasionally. Furthermore, an automated inventory system can aid the updating. The monitoring and updating allow you to ensure you know the available inventory and help reduce deadstock, stock out duplicated orders, or fraud.
Purchase goods when inventory level is low
Customer places orders, so it is natural for your inventory level to become low. You can use automation solutions to create low stocks level alerts when inventory falls to a certain number.
Supplier relationship management is crucial for effective stock purchase. In times of supply shortage, you can allow backorders if the restocking status is clear.
Inventory management process best practices
Despite the risk of having short inventory, most business owners haven’t find the best way to grow their revenue and improve customer experience. If you still have a challenge with your inventory management process, you can follow inventory management process best practices to streamline your business to the next level.
Analyze, plan, optimize
The heart of every good inventory management process is knowing what you have and managing it properly. When you implement the right inventory best practices, you can optimize your level to boost efficiency and meet customers’ demands. Customers won’t hesitate to drop their negative experience if you dint meet their expectations. However, analyzing, planning, and optimizing your inventory can help improve your business and customer satisfaction.
If your inventory is not being effectively managed, you might need to look for a way to reduce inventory holding cost.
Use a suitable system and solution
One of the best business solutions you can implement is using an inventory management system. Today, we have a cloud-based inventory management system that allows you to work seamlessly. You have to pay a subscription to enjoy the full benefits of inventory software that suits your business.
Importantly, cloud-based inventory works in the background, running everything smoothly. However, the software needs trained staff to operate it. During training, you can ask any question as you understand how the software works. Using an automated inventory management process saves your business cost, manpower, and resource as you improve on customer satisfaction
