Do you know how to avoid mismanaging your inventory? Here’s five ways you can improve your inventory management, whether your business is small, medium, or large.
Track Inventory Accurately
It is vital to make sure that you have the correct inventory levels at all of your storage locations. An inventory management system has tools to help you do this. As a result, you can ensure that stock is ordered on time and use reports to reduce overstocks and stock shortages. Also, you can create purchase orders, and make sure items are picked, packed and shipped. Automating your inventory processes will reduce errors when tracking your inventory. Use Electronic Data Interchange and barcode scanning to track every stage of the process
Optimize Your Inventory
Reports and past records can help you analyze past inventory levels. Thus, you can optimize how much inventory you keep on hand. By doing this, you can also reduce the costs of storing excess inventory. Optimizing your inventory levels can decrease the amount of overstocks and stock shortages. This will lower shipping costs, and the amount of obsolete stock that your company retains.
Prioritize Your Needs
Are you prioritizing your needs? Managing inventory is a difficult task. If you don’t prioritize, you may feel overwhelmed and miss opportunities to optimize the efficiency of items.
Lisa Girard of Entrepreneur Magazine wrote, “Generally, 80% of demand will be generated by 20% of your items. Spend most of your effort on those “A” items… The next highest-selling 30% of items, the “B” items, will typically generate about 10% of sales. The slowest selling “C” items account for half the items you stock, but only generate 10% of your sales.”
Using Inventory Management Software
Excel spreadsheets are highly prone to error and data loss. They do not provide you with the tools you need to stay competitive. With the market today and the rise of e-commerce, there is more emphasis on streamlining inventory processes. As a result, you can ensure you have accurate and quick deliveries. Inventory management systems are designed to manage your stock. They are able to help your company reduce your inventory inefficiencies, and improve inventory control and visibility.
Have Backup Plans
Whether you have 100 items in your inventory or 100,000, you need to make sure that your system is backing up regularly. Your data could get lost or stolen, and having a back up will put you back on track quickly. Otherwise, this could result in extreme losses for you depending on the size of your inventory.
This post used references from Entrepreneur.com.