To Manage Inventory Effectively, identify and respond to trends to ensure there’s always enough stock to fulfill customer orders and proper warning of a shortage. It also prevents product and production shortages. Prevent excess stock and too many raw materials and much more.
Here are 5 simple steps to manage inventory efficiently,
Choose an Inventory Management Tool
There are many different options when it comes to inventory management tools. The right choice depends on the individual needs of your organization. By choosing an inventory management tool that meets your organization’s needs, you can streamline the tracking process. Additionally make more informed decisions regarding the management of your stock.
Some of your options include using:
- Pencil and paper
- A spreadsheet software
- Specialized inventory management software
You can certainly track your inventory manually, but choosing cloud-based software can provide you with analytics in real-time. That’s because many of these tools can connect with your point of sale (POS) system. Thus allowing them to automatically adjust your stock levels every time a sale is made. Additionally, these tools often alert you when inventory is getting low and it’s time to stock more.
Aside from providing you with up to date metrics that can improve your inventory management processes; cloud-based tools give multiple people access to this data, from anywhere and at any time. This level of flexibility makes this type of inventory management software a beneficial choice. Especially when you are managing the inventory for multiple locations.
Focus On Forecasting
Forecasting analyzes your past sales figures, marketing strategies, promotions and predicted growth as well as the overall trends of the economy and market so that you can predict future needs. When you effectively forecast, you can track how much inventory you might need for certain seasons, months and even weeks.
Sell Goods Chronologically
Though selling goods in the order they were made or purchased is especially important when dealing with perishable items. For example like medicines, makeup or food. Further it’s a good idea for nonperishable items as well. This is because even nonperishable goods can sustain damage or become unsellable if they sit for too long.
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When using this approach, known as first-in, first-out, or FIFO. You organize your products so that the oldest items are more readily accessible by adding the newer goods to the back and pushing the older items to the front.
Pay Attention to Demand
Keeping track of inventory helps you become familiar with the goods you have in stock and how quickly they are used or sold. An important aspect of tracking your inventory involves identifying the goods that have a low turnover. When your organization has excess stock, it monopolizes funds, space and resources.
By recognizing products that rarely sell, you can develop creative strategies to help get rid of these items and perhaps consider not stocking these goods in the future. Some popular methods for encouraging the sale of low-turn stock include promotions and discounts.
Perform Inventory Counts
Even if you choose an inventory management software that tracks your stock for you, it’s still important that you periodically perform inventory audits. This allows you to compare how much inventory you think you have with how much you actually have on-hand. You can use different techniques for this depending on your organization and how quickly it goes through stock. For example, some companies do an inventory count every month, while others may perform an annual audit and simply spot-check their goods throughout the year.
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