Inventory management is a supply chain management module involving the tracking of goods entering and leaving the warehouse. An inventory management well-informed strategy is when you have stock on hand, you know how much to order, your merchandise shipping date, and lots more. How to manage inventory effectively is a must to know to get an insight into the business operations and to have a firm grip of your warehouse aspects.
Tips to manage inventory effectively
Analyze supplier performance
Having an unreliable supplier is the root cause to cause inventory problems. He may deliver late or short quantities habitually. You cannot let it continue. Discuss with your supplier the issues and identify the problem. If required, switch to a new supplier or you will have to deal with uncertainty or running out of inventory.
It is a no-brainer. It goes beyond the sales. Daily understand the items sold and update the inventory. Analyze the data; you will know the fast-selling items, the seasonal items moving fast, specific day selling items, items that always are sold together, etc. You will get a broader picture and know how to manage inventory effectively.
Inventory Control Personnel
Hiring an inventory control personnel ensures efficient management. He should be an inventory control specialist. If so, he will manage the merchandise on hand and also in transit. Having an inventory of high levels adds to overhead costs and expenses. Thus, maintaining an effective inventory helps to determine the demands of inventory. The inventory personnel manages returns, performs adjustments, limits seasonal inventory, and also cuts back on items that do not sell.
Audit your inventory
A comprehensive count is a must every year. Some do it weekly or monthly, besides spot check daily of fast-moving items. Regardless of how you do, you may physically count on the inventory to ascertain it matches with your list. Categorize into priority groups and order frequently. Experts suggest segregating inventory into fast-moving, pricey, lower-cost, and moderately prices moving in variations.
Invest in technology for inventory management
Businesses should manage only the doable things manually using notebooks and spreadsheets. Once your business picks up the speed, more time is essential for inventory as there is always the risk of losing stock out of control. Inventory management software makes tasks easier. It provides clear analytics of the inventory and is easy to use.
Use technology that integrates
There is much inventory management software available and it is not enough to manage stock. The POS systems and mobile scanners help to stay on track. Investing in technology that integrates is important to know your inventory status. If not, each time you have to transfer the data, spending extra time. Transferring of data may end up with inaccuracy in the count. Ensure integration of technology with the POS system.
Stay consistent in stock
Make sure to follow the incoming inventory in a standard process. If not, it will end up in discrepancies and leave your head-scratching by the month or year-end. Instead of wondering about the missing numbers, ensure verifying the boxes receipt and unpack under your supervision, count accurately, and maintain accuracy.
How to manage inventory effectively is simple if you measure the turnover and delivery time. It will show how much inventory sells and the time it takes to reach your customers.