5 Ways to Improve Inventory Management
10 Jun 2021
One of the best ways to grow business profits is to improve your inventory management. Even if you think you already have the best system to match your current needs and business goals, a few tips and tweaks could move the profits to a higher level. If a business can predict the timing and amount of future sales with 100% efficiency, managing inventory would be easy.
Keep in mind that the longer your business has been around, the more inventory data process. A reliable forecast will include your business’s maturity curve, market bearings that could affect the business, consumer reliance, and your sales and promotions calendar.
Excellent inventory management systems may not completely solve every small business obstacle, but they can help smooth out the harsh spots and significant changes. Here are five ways you can improve your business’s stock string with enhanced inventory management.
Determine Minimum Stock Levels
If you have a customer with their heart set on one of their products and tell them that you are out of stock, you will diminish your customer satisfaction. Moreover, you not only have to think of the customer but your supplier too. Chances are, ordering a certain number of products needs time and effort to get them to you. With your stock at zero and your supplier cannot deliver the product when you want it, you just lost a customer.
There is no ideal resolution to holding carrying costs with the need to stock sufficient product on hand when an order comes in. The question remains, how can you have just enough stock but not too much?
There is no way to reach the absolute inventory level; however, you can determine your ideal minimum stock level. This is a great way to address the topic without having to lose profits or carry expenses. If you have too many products and cannot seem to find the right dose of each, set a minimum stock level for each item. Base your minimum stock depending on sales information that you have gathered over time. You can have a general knowledge of the times where your orders peak and when they lay low. Ideally, you should put in your order for products during the low time. That way, you will not face any obstacles.
Comprehend Your Supply Chain
Before you start ordering your products and assign a date and time for them to arrive, you must first fully understand what goes on with your supplier. Your supplier will need to order the raw material to have enough on hand to make the items. Then you have to consider the time spent on manufacturing, shipping, and other features along the way. All this considered, keep in mind that you are not their only customer.
When everything works perfectly, then order management to secure a good stock level is a breeze. However, the trick lies in adjusting your operations according to unforeseen circumstances. Any number of mishaps can throw things off and eventually affect your supply chain. While some events are inevitable, but following all the connections in your supply chain can assist you to stay on top of all events. At eSwap, we think this is a chief component to maintaining your inventory clean and flowing smoothly. By examining prior records data, we have served small businesses to generate a system for order quantity and efficient reordering to reduce supply chain disputes. Stocking the most modest inventory number is a solid way to ensure a solid turn of the most products.
Adjust your Stock Keeping Unit
When dealing with inventory management, keep in mind that even the most improved inventory management system cannot possibly predict every raceme in demand. Sometimes you may be facing such a good market presence that you run out of products, or maybe the market is slow, and you have plenty of products left over. In cases like this, employing the help of software such as eSwap can help you change the SKUs and reform individual items into cases. This is especially helpful when your business hits a crunch time, and there is not enough time to ship more stock.
Get Slow-Moving Products Out of The Way
When your inventory is blowing out of control, this will cost your business in various fashions. Let’s say that you have $100,000 in inventory, and $70,000 of that is bound to products that are just resting on the shelf. This is a bad idea both financially and space-wise. Keep in mind that carried inventory does not appreciate in value. In fact, it often depreciates. Moreover, there is also a tremendous opportunity cost factor to cash with this leftover inventory.
The money you invested on those stocks would have been better spent on advertising or website upgrades that would increase your sales. eSwap works closely with its customers to improve inventory management. Our main aim is to get efficient inventory to turn over promptly. Markdown the products that are not moving and put those stale items on sale.
One of the most challenging aspects of improving inventory management is maintaining the inventory that is no longer there. Shrinkage is another term for damage, breakage, loss, and petty theft. Most companies determine a base allowance for shrinkage cases.
This means that your inventory management system is likely to have missing links; these are items that arise in your inventory logs but are not on the shelves. Using inventory management software will help you guarantee that you have logged in to every product that comes in.
Stock that is sold out regularly is the mainstream of sales that help businesses strive in any economy. Although managing the best inventory level may not be the most pleasing element of efficiently managing a business, however, this is one area that you can put to rest with the help of online software companies like eSwap.