Inventory management is the process of ensuring you have the right amount of products in your store at the right time. For example, if you sell computers, you need to have enough computers in your store at the time students are opening the school. Why? The demand is highest when schools are opening.
Managing your inventory means you don’t have excess stock, and products aren’t out of stock. In that case, you need software other than excel to help you manage your inventory. Why can’t you depend on excel?
When you use excel as your inventory tool, it means you have to update it manually, and you leave out some details of a product. On that context, you need software that automatically updates your inventory. For example, Amazon has been able to avail products to customers they have an inventory system that shows them when products are out or in stock. Besides using the software, you need to follow other tips to help you realize business success.
Tips on How to Manage Inventory
1. Use the FIFO Approach
First in first out approach is where you sell products in chronological order. When arranging your products, the newest should be behind the oldest to ensure that you sell the previous first. It will minimize the chances of goods getting damaged. Using your inventory system, you can get reports of the goods received against the date received.
2. Track and Stack
Analyze the products that most faster than others and put them accessible area. Revise your stock layout and arrange items into three groups. The first group, A, contain the products that are expensive and move slowly, you should have fewer of such things. Group B carries those goods that are moderately needed, and group C are those products that move fast, and they are relatively cheap.
Arranging the products into three groups will minimize the time you consume while looking for a product and thus deliver in time.
3. Consider Same Day Delivery of Products
Often, the business owner sells products and take days before providing because they have to update their inventory. Another reason is the absence of arranging products such that you can’t locate them when it’s time to move them. Moreover, the more products you keep on hand, the more you’ll pay for insurance.
However, if you implement same-day delivery, it means you’ll have solved arrangement issues and that you have an auto-updating inventory system. However, you need to choose the right parcel delivery service provider. Why? An ideal parcel deliverer will provide a reliable system where you and your customer can track the shipment of products. You need to choose one that offers the best prices too.
4. Audit and Control Your Stock
Auditing your stock means counterchecking the products on the shelf against softcopy inputs. It means your physical inventory and soft stock should be 98% accurate. So, if in your system, there are 20 laptops, there should be 20 devices on the shelf. Consequently, control your stock my delegating different duties to several individuals. For example, the employee dealing with account payable shouldn’t be the same person dealing with account receivable.
This is the right way of verifying the data before updating and saving the inventory.
Managing your inventory is a process. You can’t do all the above in one day and leave it at that. You have to keep auditing, analyzing, and updating your system. To keep you on toes about your business operations and thus near your success.