Inventory Management Techniques

They say ask yourself if what you're doing today is getting you closer to where you want to be tomorrow. It’s important to evaluate your business on a regular basis to ensure that you’re on track to succeed. One of the most integral parts of your business is inventory management.

Inventory management is not rocket science. It is just a matter of using good inventory management software & some best practices that will make the process hassle-free.?

Inventory management is the part of supply chain management that aims to always have the right products in the right quantity for sale, at the right time. When done effectively, businesses reduce the costs of carrying excess inventory while maximizing sales. Good inventory management can help you track your inventory in real-time to streamline this process.

Following are some inventory management techniques that can be implemented to any business irrespective of the nature & size of the firm:

Demand forecasting?

Accurate forecasting is vital. Your projected sales calculations should be based on factors such as historical sales figures, market trends, predicted growth, and the economy, promotions, marketing efforts, etc.

First in-First out?

Goods should be sold in the same chronological order as they were purchased or created. This is especially important for perishable products like food, flowers, and makeup. It’s also a good idea for nonperishable goods since items sitting around for too long might become damaged, or otherwise out of date and unsellable. The best way to apply first in-first out in a storeroom or warehouse is to add new items from the back so the older products are at the front.

Low turning stock

If you have stock that hasn’t sold at all in the last six to 12 months, it’s probably time to stop stocking that item. You might also consider different strategies for getting rid of that stock like a special discount or promotion since excess stock wastes both your space and capital.

Check into your stock

It is important to periodically count your inventory & make sure that you are well versed in the quantity and quality of your stock. There are different techniques to scrutinize your stock such as annual, year-end physical inventory that counts every single item and ongoing spot-checking, which can be most useful for products that are moving fast or have stocking issues.?

Deploy commercial cloud-based management systems

It is important to use software with real-time sales analytics. It should connect directly to your point of sale, in order to automatically adjust stock levels every time you make a sale. Such software provides daily stock alerts. This makes you well aware of which items are low or out of stock in your inventory.?

Trace stock levels perpetually

A well-built system for tracing stock levels helps us in prioritizing the products. Effective software also helps in reducing time and money spent.

Monitoring machinery

Monitoring the machinery helps in reducing the time spent on repairing the equipment. Essential machinery isn’t always in working order, so it’s important to manage those assets. Monitoring the machinery helps in understanding its life cycle thereby keeping us prepared before the arrival of an issue.??

Quality check

It is important to ensure that the products are in good condition. One can apply quality control techniques during all touchpoints such as receiving, picking, and packing. The signs of damage can be noticed and addressed because of these frequent QCs.?

ABC Inventory analysis

Group the inventory into ABC. ABC analysis is an inventory management technique that determines the value of inventory items based on their importance to the business. ABC ranks items on-demand, cost, and risk data, and inventory managers group items into classes based on those criteria. This helps business leaders understand which products or services are most critical to the financial success of their organization.

The inventory management system is such an incredibly crucial component of a business for accurate monitoring of both expenses and profits. This is valuable because inventory is, in fact, one of the major costs for business operations. It gives a beneficial effect on almost every part of the business from vendor to client services. Edgistify helps in managing inventory by providing a tech-enabled platform. We are one of India’s most credible dark store operations & fulfillment networks that offers D2C brands, SME's, E-commerce companies a tech-enabled one-stop platform for multiple logistics requirements in a cost-effective manner.

To know more about our services, visit us at www.edgistify.com