Effective inventory management is crucial for businesses of any size.
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Inventory management not only helps with optimising storage space — it also helps to:
Prevent under- and overstocking, streamline the process of shipping and receiving goods, and save employees time in having to rectify stock errors.
That said, effective inventory management still remains one of the biggest challenges that businesses face daily. Whether your business is in Retail, Wholesale, Distribution, Rental and Hire… Having sound processes in place along with a software solution that can help with your stock management, already goes a long way in helping to control a complex network of activities.
To help you get started, our team has compiled 5 stock management tips for your business:
How you classify your stock is up to you, but you can classify by price, expiry date, SKU, product age, product popularity, colours, condition, and more. We would advise you to be as specific as possible and clearly label your stock during the classification process. Not only does inventory classification help you to prevent products from getting mixed, but it also helps you to find stock quicker and easier when you need.
Your business might stock a wide variety of goods in a large warehouse. Without a logical way to store products by group or category, it will take your staff longer to locate the correct products in your warehouse aisles.
Instead, using bin location enables your teams to look up the bin or aisle location by using a inventory management system. Not only will binning help to improve your stock taking process, but it will also enable you to ensure optimal stock management – from receipting through to efficient selling and margin improvement.
This is a crucial and continuous step in your stock management process. Not keeping an eye on inventory levels can lead to a long list of problems which include:
The 80/20 rule serves as a good guiding principle: Generally, 80% of your profit comes from 20% of your stock. Effectively managing and keeping track of the items that help you to generate the most profit is crucial.
Develop a stock taking schedule according to your company’s requirements. Some businesses conduct stock takes monthly, and others do so quarterly. In many cases stock is checked daily on key products that are prone to fluctuations, high demand, or shrinkage. Conducting stock takes or physical stock counting helps you to determine whether the amount of physical stock correlates with what you have on your records.
It is a crucial step to ensure you have visibility of any lost or damaged products. Remember that returns and exchanges need to be factored in too, so make sure you have processes in place for that.
As mentioned earlier, stock management can be a complex process due to all the different components and steps involved. Using an inventory management system can help to eliminate a lot of this complexity and it can help you to conduct your inventory management process more efficiently and effectively.
An inventory management system will enable you to:
It’s imperative to ensure that you opt for a provider that has inventory management as part of their integrated systems. A system that is integrated will help to ensure that both trading and financial processes/variances are always in sync.
If you would like to find out more or book a demo with one of our consultants, contact us today.
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