Inventory management is an aspect of supply chain planning that tries to have the correct products in the appropriate quantities for sale at the right time. Inventory management entails managing inventory from the time it is purchased or manufactured until it is sold.
When done correctly, companies can save money by holding less inventory while increasing sales. To expedite this process, good inventory control can allow you to monitor your stock in real-time.
Why do Small Companies Need Inventory Management?
Stock control is essential for companies of all sizes to help them handle expenses and provide a guarantee that they have a sufficient quantity of inventory to meet client demand. Effective inventory management allows companies to save more money and enhance cash flow.
For example, buying goods or raw materials that remain on racks suggests that the worth of the money spent on those materials has not been utilised. On the other side, failing to keep an adequate amount of inventory to match client demand might reduce sales. It is vital for small companies to manage their inventories in a reliable and cost-effective manner.
12 Tips to Manage Inventory:
- Use the Inventory Approach that is Best for Your Company:
There is almost certainly an inventory system that suits your company. For a company that sells perishables, the first-in-first-out (FIFO) plan would entail selling the goods that were purchased first. As a result of this technique, the oldest items and materials diminish first. Most companies employ the FIFO inventory technique.
- Recognise and Estimate Demand Accurately:
Accurate forecasting is a critical component of good inventory management. Managers depend on information to monitor consumption, which includes a record of previous sales, industry trends, seasons, and technologies such as predictive analytics to assist in making statistically right decisions. Nevertheless, inventory managers should also take into account the economic situation, variations in consumption, and other considerations. You can increase your sales opportunities by arriving at the right demand in the market
- Monitor Stock Levels:
Inventory managers may fine-tune their procurement processes by evaluating such as how much of a particular inventory item is available, whether inventory is available for product innovation or displaying items for sale to clients, etc. Creating reliable documentation and an accurate inventory cycle counting system can help to reduce inaccuracies that can affect stock availability.
ClearOne provides small companies with robust stock management software that automatically alerts managers when a stock is running low and displays an inventory checklist. Monitoring stock levels also aids in the management of product demand.
- Concentrate on Quality Checks:
An emphasis on quality control is crucial across the inventory management process and a product’s lifecycle. Quality checks will help in minimising the waste and satisfying the requirements. Incorporating quality checks into all aspects of inventory management, as well as detailed documentation of important quality control features such as proper purchasing and invoice matching, is critical. It’s also essential to ensure that all employees understand and implement the procedures in place.
- Think about Drop Shipping:
Dropshipping involves manufacturers delivering products straight from their facilities to customers, removing the need to maintain the products in stock and pay the associated inventory costs. Using this procedure, you can be largely in charge of advertising and selling the product instead of being in charge of every step of the supply chain.
- Install a Point-of-Sale (POS) system:
POS software can assist your small company with real-time inventory and stock tracking. Whenever an item sells, your software refreshes to indicate stock levels and the price of goods in the store. This technology is used to monitor supplies and raw materials when they’re used at the time of sale, and it can also be used throughout the production chain.
To keep track of incoming and outgoing goods, your POS software should work in line with the inventory management system. This system eliminates discrepancies in inventory counts and provides greater reporting possibilities.
- Make Use of a Barcode System:
Barcodes make inventory management simpler, speedier, and more precise for companies.
The scanner recognises data such as size, colour, area, manufacturing time, expiry date, etc., for products in your inventory. Barcodes also improve product visibility and allow you to use it more efficiently, like by filling orders with items that are about to expire first.
- Make use of Purchase Orders:
Purchase orders are used by companies to monitor orders placed with suppliers. When products are purchased, they are inspected and matched to the order list to make sure that the item and amount are correct. Purchase orders are critical for getting inventory appropriately.
- Receive Inventory Accurately:
The first step in performing a precise stock count is to receive the items properly. To verify the accuracy, it should be cross-checked with the purchase order. It is critical to confirm that you got the proper goods ordered and were billed with the agreed price.
- Stockroom Organisation:
If inventory cannot be located or takes too much time to locate, time is lost. Optimising your space effectively allows you to keep more merchandise and make the most of your warehouse, allowing you to control expenses.
- Make Data-Informed Decisions:
One of the most important advantages of solid inventory control is the information that can assist you in real-time in making data-driven judgments. It should give information on items sold and items on hand, as well as the expenses of storing those goods and the best time to reload specific supplies.
- Purchase Inventory Management Software.
Investing in the correct inventory system gives reliable, up-to-date data for making crucial purchasing choices, including when to restock and which providers to utilise.
ClearOne’s inventory management software helps small companies to meet client demands and provide efficiency. It is a convenient and smart option which gives you inventory reports in advance, so you can purchase those items and not fall short.
A smart inventory management system ensures that you always get a precise image of your supply, allowing you to reduce waste while still providing the product and services that your consumers demand. These methods can help you set up and simplify your operations, whether you’re trying to know the essentials of how to organise inventory or revive an existing network that has gotten disorganised.