Let’s face it, businesses with physical inventory can be one heck of a challenge as it is exposed to a lot of risks such as theft, expiration, misplacement, and so on. You’ll need to track your items diligently along your sales to maintain control. Acquiring and storing inventory is also expensive, so either you earn from it or mismanage your stocks, and it suddenly costs you more than it should. If you’ve begun to struggle or need ideas on how to handle your inventory well, you’ve come to the right place. We have listed below 8 easy tips you can follow for effective inventory management.
1. Know Your Priorities
Try labeling your inventory into A, B, and C. Inventory ‘A’ could be expensive items that need few stocks. ‘C’ are lower-cost items that sell quickly. And, ‘B’ could be products in between that cost and sells moderately. Categorizing your inventory in such a way helps you understand your priorities and what you need.
2. Practice FIFO
Which means, First-In-First-Out. Stocks that came into your warehouse or stores first should be sold or used first. It would be ideal for you to place them in front of shelves or on top of your storage. In that way, you’ll avoid product spoilage or selling older stocks.
3. Track Product Information and Sales
Records of product information such as batch numbers, SKUs, suppliers, origin, and each item cost are vital to understanding your sales and keeping your inventory under control. It allows you to determine potential sales patterns, track pricing changes due to scarcity or seasonality, and improve strategies to maintain the right amount of supply.
4. Audit Your Inventory
Watch in and out transactions diligently to maintain inventory accuracy and spot the cause of shrinkage.
Ensure that you always have the right amount of stock at the right time and achieve smooth operations by tracking what products you have on hand. Once discrepancies are found, check for errors and conduct recounting of stocks. You may also look for misplaced products or ones mistaken for another item due to similar packaging.
5. Evaluate Supplier Performance
Observing the performance of your suppliers is critical to your whole evaluation process. Do they deliver on time, or are they frequently short on stocks? Learning which areas to improve and discussing such issues with your suppliers secure a competitive edge and ensure a well-functioning supply chain.
6. The 80/20 Rule
Also known as the Pareto Principle. Apply it to sales and inventory management then it would mean that 80% of your profits come from 20% of your products. Keeping that in mind, monitoring your items’ sales lifecycle and measuring how many you sell in a week or a month is vital to managing those profitable products effectively.
7. Rationalize How You Receive Stock
Prepare a standard process on how your staff should receive incoming inventory and make sure that everybody follows. Ensure that boxes are verified, accepted, and unpacked together. Count and have them checked for accuracy to avoid errors in your purchases.
8. Invest In A Good Inventory Management System
Inventory management software makes all tasks easier. Especially a system that can help you access your data on the go, update and access real-time data through your phones, tablets, laptops, or desktops.
Prevent stock outs, manage inventory from multiple locations, and ensure accurate record keeping with the help of Zayls. Enabling you to expand your product lineup and grow your business with an effective inventory management.
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