What inventory control systems and tools can you use to improve your process?

2 Perpetual system

A perpetual inventory system is a method of tracking and updating your inventory continuously, as each transaction occurs. You can use barcode readers, RFID tags, or cloud-based software to record the movement and value of your inventory in real time. This system is more accurate and efficient, but it also requires more investment and maintenance. You still need to perform physical counts periodically to verify and reconcile your records.

3 ABC analysis

ABC analysis is a technique of categorizing your inventory items based on their value and importance to your business. You can use the Pareto principle, or the 80/20 rule, to assign each item to one of three groups: A, B, or C. A items are the most valuable and account for 80% of your inventory value but only 20% of your inventory quantity. B items are moderately valuable and account for 15% of your inventory value and 30% of your inventory quantity. C items are the least valuable and account for 5% of your inventory value and 50% of your inventory quantity. By using this technique, you can prioritize your inventory management efforts and allocate more resources and attention to the A items, while reducing the costs and risks associated with the B and C items.

5 Safety stock

Safety stock is a buffer of extra inventory that you keep on hand to prevent stockouts or shortages in case of unexpected demand or supply fluctuations. It acts as a cushion against uncertainty and variability in your inventory management process. You can use historical data, forecasting methods, or statistical formulas to calculate the optimal amount of safety stock for each inventory item. By using this tool, you can improve your customer satisfaction, service level, and reputation, while reducing the losses and penalties associated with stockouts.