One of the crucial parts of running your business is restocking your inventory. Whether you’re managing a wholesale business, a retail store or an online platform, it’s best to keep your inventory stocked at the right time, or else you may not have enough to sell or end up with dead stocks.
To accomplish the task of restocking your inventory, it’s essential to know the answers to the following questions.
- When to restock?
- What items to replenish?
- And, most importantly, how?
It has become more challenging to anticipate the faster shift of demands. Due to seasonal changes, natural calamities, or maybe your products suddenly became the next big thing recommended online. To help prepare you, here are the basics of restocking your inventory.
1. Track Stock Levels
The first task to successfully replenish your stocks would be monitoring their amount and auditing your inventory regularly–even if you have an inventory management system in place. It would be troubling to find out late that stock levels in your system vs. your physical items are already mismatched.
That would be like selling products you may have run out of days ago.
Tracking your inventory levels will help you better understand inventory movement and gain insights into customer demands. Not to mention, it also reduces the chances of inventory shrinkage.
2. Don’t Forget Other Branches
If you have multiple branches and warehouses, get down to the specifics. Gather data from your branch locations to know which items move fast, need to be replenished, and where.
It would be best to also coordinate with your branch managers. Ask them, can they still follow the current demand forecast? Communicating with them helps you allocate, adjust to the branch’s needs, and restock items smoothly.
3. Set Good Metrics
Once you understand your inventory movement, leverage your data. And, never wait for your products to run out before restocking.
Predict demand and lead time forecasts from past trends to establish your reorder point. This approach will guide you through how often you should replenish your stocks.
It will also prevent you from ordering the same amount for each product, helping identify which products are worth restocking or discontinued to save you from extra costs.
4. Introducing Reorder Points
A reorder point is a set level of stock that tells you, “it’s time to order!”. After setting good metrics, you can determine the amount of stock that would initiate you to replenish your inventory.
Or there are also other methods you may want to consider based on your forecast:
Periodic: Your staff updates the inventory levels and replenishes stocks for a certain amount of time. It can be once every week, monthly, or quarterly.
Top-off: Often used by retailers, they would move their stocks from storage or warehouse to their shelves during slow periods of the day and prepare for the incoming orders.
Perpetual: Inventory levels are updated immediately after every transaction.
Demand-based: A robust foresight on customer demand is required for you to plan and reorder enough amount to meet expected demand.
Profit-based: This suggests focusing your efforts on replenishing the most profitable products. With the help of an inventory system like Zayls, you can efficiently analyze which items make the most profit and keep them in stock.
5. Prepare your Safety Stock
These buffer stocks would be the backup of your inventory in case there are any excess demands, delays from your suppliers, or financial constraints.
Your safety stock lessens the possibility of stockouts and lessens the impact of unexpected issues from production. It also reduces the chances of putting in any rush orders that may strain good relationships with your suppliers.
6. Proper Scheduling
Think about it. Probably one of the worst things you can experience is that you need to restock as soon as possible only to find out there is a one-month lead time for your orders.
For this, you should keep in mind and consider supplier schedules. It would help you decide when to reorder and give you enough time to fill up your shelves.
A profitable business depends entirely on having plenty of inventory available to meet the demands of your customers. On the other hand, if you don’t have a steady supply of products, your customers will be unable to find and buy what they’re looking for. Finding a balance between these two goals is the first step toward success.
Don’t worry! With Zayls, you can take away the heavy tasks of monitoring the ups and downs of your customer demands from multiple branches or warehouses. The system also generates reorder point recommendations based on your inventory movement, ensuring a smooth sailing business operation.
Photo by Mick Haupt via Unsplash.