There are numerous elements that contribute to how an organization manages inventory and how to do their inventory process work! For instance, small organizations utilize the pen and paper method for keeping track of inventory. However, we have to keep in mind that inventory management is the need of business if you do not implement it, you will see its impact on the bottom line. Inventory management ensures that you have stock for running a business efficiently if you don’t have inventory available then you are doing inventory management in the right way.
How to streamline inventory management?
Below we have mentioned few ways that help in streamlining inventory management:
Implement automated software – First step organizations need to make is to implement inventory management software. This software will make things a lot easier and inventory management will be simplified and optimized as well.
According to GM Insights, “Inventory Management Software Market size crossed USD 3 billion in 2019 and is estimated to grow at a CAGR of over 5% from 2020 to 2026.” This data shows that the inventory market and demand are rising because organizations are understanding the power of this software.
Eliminating spreadsheet & human error – One of the most important things for improving inventory management is to eliminate spreadsheet usage because they are prone to error and data can be changed in the spreadsheet knowingly and unknowingly. So, data is not reliable More importantly, it can be accessed by anybody.
Moreover, human errors are also there when employees enter data, they might make some mistakes while doing data entries one small error can be lethal for business. Therefore, the spreadsheet must be eliminated in order to improve accuracy and use automated software.
Maintain safety stock – Maintaining safety stock is very crucial for business if you don’t have stock in hand to sell you might end up losing a lot of sales. It will be directly impacting your organization’s profit and revenue. That is why you order inventory before all stock is finished. In order to know your safety stock, you can use data calculations and software to predict required stock.
Data for decision making –Amazing frameworks currently exist to break down your stock and deals activities information continuously. Rather than using spreadsheet or pen and paper technique, you can operate fully from an automated platform that can provide data and analytics through which you can compare sales data and use historical data and get an estimate about future demand and sales.
A stock administration framework that binds together client, stock, online business, and assembling information on one platform can mean quicker obtaining, portion and satisfaction and higher benefits. Data and statistics are helpful in making an informed decision not just based on assumptions.
Keep inventory records – Inventory records are helpful in estimating the future for inventory. When you have accurate inventory records then you can have an estimated idea about how much you will require in a particular period of time.
Insights into stock and deals tasks imply following SKU numbers just as part numbers. In the event that you do some light assembling and oversee gathered things or packs, track the SKUs, parcel numbers, and stock levels of the segment parts in the event that you need to buy or return singular pieces of congregations and units.
For this, it helps colossally to dispose of those dominant bookkeeping pages and carry out an ERP which tracks stock administration and light assembling.
Which are the most common inventory management techniques?
The most common inventory management techniques are discussed below:
ABC Analysis – in this technique inventories are divided into 3 categories Class A, Class B, Class C. In class A, expensive items are included but they are less in numbers. Similarly, in class B less expensive items compared to class A however, items are more in numbers. In class C least expensive items are kept & they are more in numbers compared to all classes.
Just in time – Just in time techniques saves the warehouse expenses as you don’t keep inventory in advance. The customer gives an order then inventory is purchased and the end product is created. However, a reliable, fast, and effective vendor is required to practice this technique otherwise business might suffer from loss.
Drop shipping – Drop shipping technique is used when you want to focus on your business and don’t want the responsibility of managing inventory. So, you give this responsibility to some inventory managing organization. Now they have the responsibility of managing and tracking inventory on your behalf.
It does not matter how big or small your business inventory exists in all businesses. Inventory is an important part of business and it must be managed efficiently. For effective inventory management, inventory management software is essential.
It provides several types of advantages to your business such as proper inventory tracking and management methods told above can be achieved easily with the help of automated software. When you shift your practice from pen and paper to automated then you get more accuracy and efficiency. It will optimize inventory and avoid out of stock issues and overstocking issues so that you can increase productivity. It will optimize inventory.
There is no doubt that inventory management software can assist your business and make inventory operations more efficient. If you want to improve your daily operations and take your business to next level and this software is essential.