Inventory management could be defined as ordering, stocking, and utilizing the raw materials andthe finished products. It fulfills customer requirements and allows a business, both big and small, to earn a substantial amount of profit.
Although it seems easy, in actuality, inventory management is a challenging and time-consuming endeavor. Even the tiniest mistake can hamper the sales. Well, mentioned below, are a couple of tips, which, when implemented with caution, paves the way for optimal outcomes. Please check them out right now.
- Prioritize Inventory
Dividing the inventory in distinct priority groups can let you understand which products you must order more frequently and more of, and which products are essential for your business but cost more and move quite slowly.
Experts usually suggest A, B, and C groups. The A group has high-ticket products that you do not need much, the C group has low-ticket products that go out of stock quickly, and the B group has moderately priced products that move slowly than C but quickly than A.
- Track Product Information
One of the best ways to track product information is by investing in inventory management RFID (radio frequency identification). It can also track each product’s prices over time so that you are aware of the factors that can change the price, such as seasonality and scarcity.
- Audit Inventory
Some organizations are known for carrying out a detailed count annually. Others do the same daily, weekly, and monthly to check their hottest items. No matter how often you do it, make sure to be a little regular, or else you would not be able to keep pace with the customer demand.
- Evaluate Supplier Performance
Unreliable suppliers usually cause problems for the inventory. If you have employed a supplier that is late with deliveries or falls short on orders always, please take some action. Tell him to improve his performance or else replace him with someone more efficient.
- Practice 80/20 Rule
According to the experts offering durable yet affordable RFID warehouse management, 80% of the profits come from approximately 20% of the stocks. So, you must focus on this 20% of products. You must understand the entire sales lifecycle, including how many you sell in a year, month, and week.
- Order Restocks
Certain vendors are ready to do inventory restocks for you. On the surface, this seems like a great thing – you save time and what you may have spent in the staff. But, remember, the priorities of the vendors are different than yours. They are only concerned to move their products while you wish to stock the products that you feel are profitable. Check the inventory thoroughly, and order restocks.
Keeping the tips stated above in mind helps the business owners to manage inventory effectively. While technological innovations such as RFID have proven effective, POS systems and mobile scanners are also rising in popularity. Invest in anyone, of course, after much contemplation.