Good inventory management can help you scale your business and make it more profitable. But it’s easier said than done.
To get the most out of your inventory management, here are 7 things you can do:
- Set minimum stock levels
One of the top objectives of inventory management is to never run out of stock. After all, you wouldn’t want to get a customer order you’re unable to fulfill. So set minimum stock levels below which you don’t let your inventory fall. This will greatly reduce the chances that you ever run out of stock.
- Use inventory management software
Next, use simple inventory management software. This saves you from manually counting and keeping track of your stock. The software automatically does it for you, so you can focus more time and energy on other parts of your business.
- Understand your supply chain better
Sometimes it helps to study your supply chain. Your supply chain has a direct impact on your inventory. If there’s a setback anywhere along a product’s path to your warehouse, it could make a big difference in your business operations. Order materials ahead of time to always stay on the safe side.
- Minimize inventory shrinkage
Anytime you have inventory that is damaged, broken, lost, stolen, or otherwise unusable, it’s considered inventory shrinkage. Inventory shrinkage is bad for business for obvious reasons. But it’s also bad for inventory management because it’s counted as inventory, and yet, it cannot be sold off the shelf. This leads to inefficient and inaccurate counting. So minimize the level of inventory shrinkage as much as possible.
- Hire extra inventory control personnel
Inventory control personnel are those who monitor inventory and make changes to it where necessary. For example, they might process return orders for unwanted stock. Or they can simply confirm the inventory received and report it to management.
But not every company has enough inventory control personnel. So hire some extra ones if you find too many mistakes being made in your inventory management.
- Perform regular inventory counts
Any business needs to perform regular inventory counts. It’s a key to good inventory management. To catch small irregularities before they snowball into bigger problems, increase how often you perform inventory counts.
- Label every item and space
Another way you can improve your inventory management is simply by labeling every item and space in your warehouse. The better you label, the better you can categorize stock and make improvements to stock placement.
- Reduce traffic in the warehouse
We all know the saying “there are too many cooks in the kitchen.” And the same can be true of warehouses. Too many employees on site could lead to overcrowding and make it harder to keep inventory tightly organized. So only allow authorized personnel inside the warehouse who absolutely need to be there to keep inventory management running.
- Measure lead time
Lead time is the amount of time it takes for stock to arrive once it’s been ordered. Measure the average lead time for different suppliers so you can better gauge when inventory levels will be replenished. That way, you’ll know when to reorder stock by to get it when you need it.
Adding it all up
Inventory management is a tough job that takes a lot of careful precision work. But if you implement the above strategies, you can rest assured your business will run more smoothly.
So pick one tip to implement today and work your way through the list. Eventually, your business will be running better than ever before!
