Where your business stands in terms of proper inventory management says a lot about its success, or lack thereof.
If you’re doing a good job, those in the manufacturing industry can depend on you when they need materials. Do a poor job, however, and your problems will circle around from your clients back to your company.
This highlights the importance of proper inventory management in business operations. With that in mind, here are some best practices to help you achieve a streamlined, effective inventory management strategy:
1. Categorising Inventory
Part of your inventory will move faster than others. As such, these will require a different management approach.
This shows the 80-20 rule really does apply for inventory management. This means you should have a bigger stock buffer for the items that sell faster. Slower-moving items, meanwhile, may need fewer buffers.
Being able to categorise your stock into what’s hot and what’s not can greatly improve your operations.
2. Forecasting Demand
The demand for your products or services is likely to fluctuate based on the season, the economic climate, and other trends. Having a solid forecasting capability can help plan your inventory, making sure you maintain appropriate levels and avoid shortages or excesses at certain times.
3. Automating Processes
A centralised inventory management system gives you a way to accurately track inventory counts, deal with seasonal changes and unexpected events, and avoid overstock or understock scenarios.
Having an advanced tool tracking software barcode technology allows you to stay on top of your inventory at multiple locations without any problem. This is especially important if you have branches in different locations and target consumers.
4. Motivating for Change
For your business to improve, everybody should be on board in all your plans. If you’re implementing a change in supply procedures, be sure everyone—from the factory workers to the delivery people—are updated with the policies.
With a new inventory and delivery system, for example, time and attendance software from Roshtek.com.au can be a great help in making sure your employees are on-time both in going to work and in doing their work.
When everyone is on the same page, things will run smoothly.
5. Finding the Problems
Don’t wait for problems to arise; track them down and make sure they are dealt with even before they cause problems to your operations. If you regularly experience an oversupply or undersupply of certain stocks, get to the bottom of it.
Do a root-cause analysis on excess inventory and know how these stocks should be handled properly the next time you order them.
Inventory management for start-ups is not really a glamorous job, but one that’s essential in ensuring your business prospers. Of course, the key is to get it right.