No matter how small your business is, if it is product-based, coming up with an efficient way to manage inventories is very important. Not only this motivates your workers to contribute to your business’s growth as the process is done orderly, it can also help you sustain that growth, thus leading you closer to success. On the other hand, a lousy inventory process can cause mismanagement that may only draw customers away. Not to mention, wrong inventory practices can also hinder a worker’s full potential.
Inventory Management’s Importance
Inventory management focuses primarily on the supply chain with an aim to ensure timely replenishment of items before they get out of stock. If done right, it can also prevent the occurrence of overstocking which ties up the capital unless the item is on high demand.
Fortunately, nowadays, different approaches and techniques which are designed to better and ease inventory management have been introduced. Automation of inventory management processes, for instance, has played a major role in helping a business run smoothly and efficiently. This and other many benefits are made possible with the help of an inventory management software.
Inventory management software is a program designed not only to address mismanagement issues but also to provide a streamlined process in handling inventories. It makes all inventory functions easier, e.g. product quantity monitoring, real time product quantity updating, etc. With its help, costs of carrying excess inventory are reduced, product spoilage and obsolescence are avoided, warehouse space is efficiently utilized, and sales are maximized.
A standard inventory software includes advanced reporting facility that provides timely reports for business owners to base and rely on in making decisions. Most inventory management software are priced based on this and other important factors like how many users it can accommodate, if it can be accessible via cloud, if it allows invoice and receipts printing, and some other advanced features like cost tracking, etc. There are also software that demand a fortune but providers of these have already included user trainings and long term technical support in the package.
If you are planning to purchase an inventory management software for your business, bear in mind these basic yet very important features. (Since you are willing to bear the cost, might as well make sure it is capable to do the following):
- It can provide real time monitoring of inventories
- It alerts the user if a product is nearing its reorder point to help prevent stock-outs and shortages.
- It has a centralized storage for all inventories from several locations or warehouses and allows simultaneous usage without compromising the records and the updating thereof.
- It has a report facility that lets users extract timely reports, paving the way for an easy inventory analysis and reliable demand forecast.
- It can be integrated with third-party support systems like retail POS system and office programs.
- It offers quick and convenient barcode scanning to optimize warehouse processes.
- It allows storage of multiple photos for each item and its details for a more intuitive way to keep track of inventory. Go for one that is completely customizable.
With these features, your business will most likely reap the sweetest benefits like cost reduction and better cash flow.
Inventory Management Practices and Techniques for Your Small Business
With the help of a good inventory management software, below are some practices and techniques that you can use in managing the inventory of your small business:
1. Sales Forecasting. Best if you base your forecast on historical sales records and map these with other important components like market trends, the latest economy, and the importance of marketing efforts.
2. First-in, First out. If your products are perishable, e.g. flowers, makeup, or food, this practice is best for you and it is simple; items that were purchased first are to be sold first. Bars usually follow this method in maintaining wine inventories. Nonetheless, nonperishable items can also benefit from FIFO especially for depreciable products.
3. Low-turn Stock Management. For instance, if your stock have been untouched for months already, then do not attempt restocking that product. Low-turn stock management also encourages business owners to lay out promotional ads or special discounts aimed to get rid of that stock.
4. Regular Stock Audit. Although a good inventory management software has been deployed and used for months already, manual counting on a periodic basis should still be carried out to make sure system-calculated figures match with the actual stocks. For this, you can do annual year-end physical inventory. This also checks if the products are still useful and saleable or otherwise.
5. Regular Monitoring of Stock Levels. With your inventory management system to assist you and your personal effort, you should perform stock level monitoring regularly and keep your focus more on high-priced items. This is where the system helps the most; it mostly does the job, saving you time and money in the long run.
6. Regular Checkup of Equipment. Warehouse machinery plays a vital role in keeping your inventory in place, hence it is wise to maintain such assets regularly to avoid costly repairs. Regular checkup of these equipment will help monitor their life cycle easily. This will also prompt you to prepare backup machines before issues arise.
7. Quality Control. Advanced inventory management software can assist you check and record inventory items’ conditions from time to time and can print labels for checkups. As quality control is important to make sure products are perfectly working and looking, you can run a checklist and store the result on the system for easier results analysis and monitoring.
8. You might need a stock controller. This is especially if you have a lot of inventory to manage. A stock controller processes documents of purchase orders, receives deliveries literally and document-wise, and overall makes sure the physical items match with what is stated in the document.
In managing your inventory, using cloud/Internet-based, mobile-ready inventory management software is also a plus as it is more capable of providing real-time sales analytics that you can have access to anywhere, anytime as long as you are connected to the internet. With this, efficient workforce, a more streamlined, efficient inventory process that maximizes gain will likely be attained.