The way an organization handles inventory management may be the difference in making a return or not generating a profit. By making your inventory processes as efficient as possible, you’ll end up selling products at the best price and making your buyers happy. Whereas if your inventory management is run badly you’ll find you lose stock, have items taking up valuable space in your warehouse for too long and will not provide customers with a good service.
Inventory management programs can provide you with a helping hand to getting your inventory in check. But recognise it’s not a miracle cure. You should get your processes ship shape to be able to maximise the worth of an inventory system. Here are our top 10 methods for getting your inventory in line:
1.Check in products immediately as they are delivered
Your inventory management software should have a record for every last item you’ve in your warehouse. Or else you may find you’re losing items or not recording sales, this is particularly important if you’re getting deliveries from multiple vendors. If you’re not accurately recording your stock then you might not have the full picture when reporting on lucrativeness of products and this can result in bad choices being made when re-ordering inventory.
2. Place purchase orders (POs)
Being fastidious about placing POs can make your daily life much easier when it comes to managing purchasing and suppliers. As you have a written record of all your ordering details (like amount/date ordered) you will never again have disagreements with your providers. Any disputes can be resolved quickly and fairly as you will both have a written record of all your orders.Keeping a record of your purchases is good for your future re-ordering too. It is possible to review previous purchases and see what products have been successful for you by reviewing their cost versus how much you sold them for. If you have POs already stored on the system then re-ordering is much simpler too, you can just duplicate an earlier one, update the information, and re-send in a few clicks. Working with a centralised record of your purchases means that anyone from your company can access this informtion even if you are not there, They’re able to always see what’s been ordered so will never accidentally re-order a second time and can inform customers of timescales about when an item is due to be back on hand.
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Every item in your inventory system should be given a barcode. By having a barcode all you have to do is scan the product to find out all the details you’ve got stored on it. Helping you save a a lot of extra time by giving you these details a the click of a barcode scanner.
4. Do a regular stock take
Irrespective of how careful you are when adding in details about your goods to your inventory program errors will occur, to keep the data as accurate as it can be be sure you do a regular stock take. Try randomly selecting a product line once per week and making sure that the amount and information on item are accurate. Get another person to double check your count as well to make sure human error is at a minimum.
5. Get the balance right
Try to strike a perfect balance with your stock levels, neither over-ordering so you have too many items, nor under-ordering so you have too few. Remember you’ll want enough readily available in order to satisfy your customers demand but don’t want so much that you risk having cashflow problems. The reporting functions in your inventory management program will help you to find the correct balance for your product lines. Pay attention to seasonality when your analysing the reports, making certain to take account of the fact that some items will sell well in one season and not so well in another. When it comes to decision making nothing compares to your own individual experience, make sure you stick to your guns and don’t get sucked into any bad purchases.
6. Adjust for loss, write-offs and donations
If any items happen to have been lost, given away or unexpectedly damaged ensure that you keep track of this in your inventory management system. You won’t want to end up in a predicament where you are counting on money coming in that isn’t actually going to show up. You can use the data in your system about losses, write-offs and donations over time to allow you to improve your workflow to help minimise the quantity of loss that is affecting your profits.
7. Cut out double-selling
Allocate products for customer when they’re deliberating about a purchase so that these goods don’t get sold anywhere else. This is particularly useful if you have an online shop as you are able to allocate items which are sitting in the checkout basket ahead of purchase. You will only be able to utilise this type of functionality if your website integrates with your inventory management program so pick business software which is compatible, or even better comes integrated ‘out-of-the-box’.By having a inventory system that integrates across all your sales channels you’ll get rid of double-selling. If an item is assigned to a buyer on your website you will avoid unintentionally selling it in your ‘bricks and mortar’ store or via online marketplace listings.
8. Set your minimum re-order levels
Set up your inventory management software to remind you when you’re getting to a certain minimum quantity of stock. By making sure you don’t ever run out of stock you will never miss out on sale because you will always be able to keep up with customer demand. By making sure you avoid stock-outs you will have much more efficient shipment process and will keep your customer satisfaction high. Meaning you are more likely to get returning business and word-of-mouth recommendations.If you opt for inventory management software that integrates with your CRM and can thus pre-populate your purchase order, then better still. All the information you need can easily be pulled across in seconds.
9. Develop a good relationship with your vendors
Be polite and ensure to pay them on time. This way if you find yourself in need of a favour they are more likely to be happy to help you along. You have a mutually dependant relationship so being on good terms is essential. You need their service for your business to turn a profit and vice versa.
10. Get things out of the door
Don’t let products hang around in your warehouse for too long. If an item is just not selling then that space could be put to better use holding items that will sell. Discounting this stock to get it shifted might be more cost-effective then letting it take up this valuable warehouse space. Plus keep in mind the longer you have items the more likely it is to get damaged or lost.Shift stock more quickly by offering it across multiple channels. Other sales channels might provide a market that is prepared to pay full price for the products which would otherwise need to be discounted. At minimum the sheer volume of extra potential customers should assist you in getting products out the door a lot faster than if you stay with just one channel.