7 tips for optimizing your inventory management will help you to deal efficiently with inventory controls.
You may be wondering how you should approach the inventory management of your SME. It may seem like a simple matter, but the truth is that there are many aspects that can go wrong or become complicated if you are not careful and do not control what you do as much as possible.
Whether you are a merchant with a physical store or an e-merchant with an online store, you are concerned with the inventory management of your products.
Inventory management is defined as the proper administration of registration as included in the branch of cost accounting, purchasing and stock removal within the company.
Today we bring you 7 inventory management tips that will help you correctly orient yourself to success and growth.
1. Limit the number of references in its stocks
Check your references and see if any are less used. If so, rationalizations need to be made. These parts encumber the stock and are, mechanically, synonymous with cost!
2. Make your data more reliable
To properly manage flows and transactions, be sure that the information that will pass through your information system is as reliable as possible. For this, do not hesitate to set up rotating inventories to immediately correct any discrepancies.
3. Do an audit of your inventory
A regular check of records through alternative methods is must. This is because your software which takes care of warehouse management may not give absolute correct results. If there are discrepancies you need to correct them time to time.
Even with the best software on the market, you need to do periodic tests to make sure the numbers match and fit. Although errors also exist in computer systems too, but they are less common than in humans, so performing this double-check might not be a bad idea.
4. Opt for “delayed differentiation”
What if, instead of storing the final product, you only manage the individual parts to be assembled? The principle of delayed differentiation allows you to have elements common to several products and therefore to optimize your storage capacity.
5. Anticipate delivery times
The manufacture of a product is anticipated at all levels, more particularly, on the lead times. Since an engine purchased in China takes about a month to transit by boat, these delays can be potentially long! Make sure you anticipate them in order to have an overview of the parts available at the moment T and to know your needs as precisely as possible.
6. Balance inventory turnover and service rates
To lower inventory levels while serving demand, pay particular attention to inventory turnover. The more it increases, the more your stock is optimized. Put this indicator in relation to the service rate, specifying whether you are respecting delivery deadlines.
7. Establish consumption forecasts
To be sure you have all the parts needed for production, without over-stocking, make a consumption forecast. A good ERP allows you to collect the statistical view of what happened and define the forecasts.
What is the best program to keep track of inventory?
There is a lot of ERP software on the market. You can find them either over the counter or for a fee.
To manage and implement all these good practices, get help. Your ERP can automate most of these tasks and alert you at the right time on the analysis of your consumption, your stock level or even the traceability of your products. In short, dive into the predictive analysis of your inventory management.
What is effective inventory management?
Reduction of operating costs and efficiency in the services offered. For a company that wants to stay competitive in the market, these are two fundamental strategies. One of the ways to make them part of your business routine is effective inventory management.
This management helps you keep everything in order and have reliable data to measure the operation of the stock, in addition to preventing you from spending more than necessary.
Keep everything in order | Inventory Management
The main question for those who do not yet have efficient inventory management is how to achieve it without making high investments in technology and equipment. Although the software available in the market helps, and a lot, Pantoja-Navajas teaches some tips that can facilitate inventory management:
- Always update the status of the product in your e-commerce, if that is your sales model, and prevent the consumer from buying something that is no longer available
- Learn to analyze the historical data of your company as a possibility to glimpse future characteristics and supply needs
Tips For Optimizing Your Inventory Management
- Constantly evaluate the need to increase the volume of the stock, in accordance with the approach of a commemorative date or period in which your business tends to have better results.
- Avoid accumulating products with reduced validity or, in the case of clothes and footwear, that can go out of style in a short time
- Look for suppliers that offer good prices, but also fast replenishment.
Conclusion: Inventory Management
Now that you have all the major inventory management techniques in your hands, all you have to do is invest in inventory management software that meets all your expectations.
- 1 1. Limit the number of references in its stocks
- 2 2. Make your data more reliable
- 3 3. Do an audit of your inventory
- 4 4. Opt for “delayed differentiation”
- 5 5. Anticipate delivery times
- 6 6. Balance inventory turnover and service rates
- 7 7. Establish consumption forecasts
- 8 What is the best program to keep track of inventory?
- 9 What is effective inventory management?
- 10 Keep everything in order | Inventory Management
- 11 Conclusion: Inventory Management