Inventory management consists of activities such as controlling the orders, supervising a number of products being manufactured etc., to maintain a flawless supply-demand chain. It involves different aspects like quantity of production, the time taken for production, order fulfillment to ensure an efficient business.
There are many effective ways to handle your stock better than before. This article gives you a quick insight over the points which you need to be aware of to take care of your inventory.
How to manage inventory effectively?
1) Importance of IMS – Inventory management software is a must of any business if you want to be the best in what you do. This software neatly divides your business into different sub-parts to make sure that every section is being taken care of.
Your task is simplified because now you can analyze your business in detail, like approximate production goal, tracking inventory, orders received, deadlines, billing information, alarming situations and so on. Therefore it is easier to spot errors and probability of screw-ups are reduced.
2) Exact Forecast– You need to be on your toes. You must set your target production based the varying trends of the market. Nowadays, trends change in the blink of an eye. Thus you can not keep manufacturing same amount of goods every week and expect to excel.
A precise forecast on the basis of the record of customers’ demands and market analysis is required to produce an appropriate quantity of goods. This way, under and overproduction is avoided and customers always get their needs answered. Overproduction is a curse for business due to storage costs, dead stock etc. An accurate prediction can satisfy customers as well as save unnecessary costs.
3) Set your priorities straight– Identify the hits and flops of your store. There are some products which sell themselves and are sold at a rapid rate without any marketing. While some of the goods fail to perform and are rejected by customers.
You must be aware of the stuff that customers are not buying whatever may be the reasons. You need to get rid of slow-selling merchandise to avoid the possibility of dead stock. Empty shelves are open opportunities and they must be stocked with best-sellers rather than useless goods eating up the precious space.
4) Reduce loss of goods– A lot of stock goes in vain due to theft or misplacing of inventory. This causes an unexpected reduction in quantity and a compromise in gross profit, this must be dodged. Make proper security arrangements like CCTV cameras, inventory tracking technology like RFID(Radio Frequency Identification).
Make it obvious to your staff that you are very careful with each transaction and do not let minute things slide away without taking notice. This way maximum people at the business will refrain from such activities.
Only authorized personnel should be allowed to operate Inventory management software and transaction records. Thus safeguarding the documentation of cash flow and quantity present.
5) Real-time data- Use of real time analytics makes sure you never disappoint your customers or at least do not give false hopes. With recent advancement in technology real time inventory management is extremely popular. It is flawless because it is updated after every transaction.
It involves making every small movement in your inventory visible to the customers so that they can make better decisions. Every time an order is placed you make an employee run to the warehouse to check whether you will be able to achieve that order timely or not. Real time management tells you beforehand how much stock you have on hand and thus no mistakes are made which harm company’s reputation in any way.
The above points surely make your business more competent than it really is. General idea is to never fail to satisfy your customers without paying extra cost for it. Better inventory management curtails on additional costs and thus increases revenue.
Author Bio: Raviraj is Growth Hacker & Content Strategist at EMERGE App – an order management system for wholesalers. EMERGE App servers all physical product based business model – wholesale, trading, distribution & ecommerce looking for comprehensive, user-friendly & yet affordable operation management system.
