How can you track inventory levels to ensure you have enough stock?

1 Know your inventory types

The first step to track your inventory levels is to identify the different types of inventory you have in your food manufacturing process. These may include raw materials, work-in-progress, finished goods, and packaging materials. Each type of inventory has its own characteristics, such as shelf life, storage conditions, lead time, and reorder point. You should also categorize your inventory based on its value, demand, and turnover rate, using methods such as ABC analysis or Pareto principle. This will help you prioritize your inventory management efforts and allocate your resources accordingly.

3 Implement inventory control techniques

The third step to track your inventory levels is to implement inventory control techniques that can help you optimize your inventory levels and reduce waste and costs. For example, FIFO (first-in, first-out) ensures that you use or sell your inventory in the order of arrival, minimizing the risk of spoilage and obsolescence. Additionally, EOQ (economic order quantity) helps you determine the optimal order quantity that minimizes the total cost of ordering and holding inventory. Moreover, safety stock helps you maintain a buffer of inventory to prevent stockouts due to unexpected demand or supply disruptions. Finally, cycle counting involves regularly counting a small portion of your inventory to verify its accuracy and identify any discrepancies or errors.

4 Review and improve your inventory performance

The fourth step to track your inventory levels is to review and improve your inventory performance regularly. You should measure and analyze key inventory metrics, such as inventory turnover ratio, fill rate, stockout rate, and inventory carrying cost. These metrics can help you evaluate how well you are managing your inventory levels and identify any areas for improvement. You should also benchmark your inventory performance against industry standards and best practices and implement corrective actions or preventive measures to enhance your inventory efficiency and effectiveness.

5 Train and communicate with your staff

The fifth step to track your inventory levels is to train and communicate with your staff who are involved in your inventory management process. Your staff should be aware of the importance and benefits of tracking inventory levels and follow the established policies and procedures for inventory management. You should also provide them with adequate training and support on how to use your inventory system and apply your inventory control techniques. Additionally, you should encourage feedback and suggestions from your staff and foster a culture of collaboration and continuous improvement for your inventory management.

6 Leverage technology and automation

The sixth step to track your inventory levels is to leverage technology and automation that can help you streamline and simplify your inventory management process. Automation can reduce human errors, save time and labor, and improve accuracy and consistency in your inventory management. Examples of technology and automation for inventory management include IoT, AI, and ERP. IoT enables you to connect your inventory devices and sensors to the internet to collect and transmit data on your inventory conditions. AI helps you analyze and predict demand and supply patterns to optimize decisions like ordering, replenishing, and pricing. ERP integrates inventory management with other business functions such as finance, sales, production, and boosts operational efficiency and visibility.

7 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?