5 Inventory Management Best Practices You Should Know

February 21, 2020 in Inventory

5 Inventory Management Best Practices You Should Know

I am sure you will agree if I say inventory management is painful job but still the important part of any business. That is why following the best inventory management practices will not only save your time but money as well. So, in this article you’ll know the best practices you should implement in your inventory management system to ease your job. Before we move forward. Here’s the few words on consciousness of bad inventory management.
If the inventory is not properly managed it will take extra warehouse space, goods can get spoiled due to being kept in the warehouse for a long time, they may even go out of fashion being unable to keep pace with ever-changing fashion trend, there may be a loss of inventory by stealing or misplacing and many such other circumstances may occur resulting in a burden on business.

5 most important inventory management practices to implement in your business.

Take advantage of technology

Still stuck with the primitive method of pen and paper in managing and tracking your inventory? Start thinking broader, apply the advanced technology to do so. Spreadsheet and inventory management software will help you manage your inventory in a better manner.
The spreadsheet can help you be more organized. But it will not assist you in the inventory management planning. You can only input data on it and get an idea of the available inventory.
If you are looking for a solution which will help you in organizing, managing and planning your inventory better, you need to opt for Inventory Management Software. You might think it will cost you a lot of money and why to waste money on it? But give it a second thought, take a look at the various inventory management software available in the market. Take into consideration the positive attributes it will add to the business, you will find they are numerous. Choose the one which is less expensive and suits your business needs. I can assure you that this money spend will earn you a lot in future saving your wastage of time and energy on inventory management.

Keep a record of the right data

While choosing an inventory management software, you should be clear about the specifications you need to keep a record of. Keep in mind, the more accurate the record will be, the more accurately you can manage inventory and take better and appropriate decisions in the future. Remember, to add modules like the cost at which the inventory is procured, the manufacturer, department name, stock keeping unit, date of procurement and date of selling, location and so on. Note that these modules are subject to change according to your business specific requirements.

Procurement to be done wisely

A commendable businessman is one who does not only make the customers pay the right value of their product but also buys inventories at right value from its various vendors. Your profit will be calculated by totaling the amount you have spent in procuring the inventory to the amount spent till POS and subtracting it with the amount paid by the customers. So if you pay more amount for the inventory your profit ratio will automatically go down.
You should always keep a check on the purchasing price of inventories. Survey the market, talk to the vendors, compare the amount, and other charges quoted by them in bringing the inventory from their place to yours. After taking all these aspects and other related aspects into consideration make the best decision to choose the right vendor providing the best deal.

Centralize your inventory data

The inventory needs to be procured from different vendors and different places, we all know this is time-consuming and tiring. But we do not have any other option for this as we want to make the best purchases. Imagine if data about different inventories are to be entered at different places. No doubt, a lot of time will be wasted looking for the specified fields to enter inventories. Would it not be better to centralize all the inventory data under a single system. Think about this and you will definitely have positive views about this idea. It will not only save your time but also will help to overcome any human error due to mistyping or over-viewing.
If all the information about the inventory is at one place you will be able to have a better idea and can draw better conclusions about decisions regarding inventory, such as when to buy inventory, where it is located in the store/warehouse, keeping a check on any wastage, and so on.

Dodging the out of stock situation

It might happen that your customers are demanding a certain product from you. But it is out of stock and you are not able to provide it resulting in a missed sale for you. Moreover, this hampers your reputation and gives your competitors a better chance to make business with your not so satisfied customer. The customer might even think that you do not have much stock and they might even not come back for any purchase in the future. You can avoid this situation, with managing your inventory more appropriate. Keep a check on the inventory from time-to-time, look and compare the data available and try not to ever run out of stock.

The above list will definitely help you keep a well-adjusted and well-organized control over your inventory management without being a burden on your resources. Hope you will be able to learn the best way of inventory control suited the most for your business scenario!!

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