Determining the optimal inventory level will reduce the capital tied down in stock and lower stock-outs’ risk. The idea is to ensure that goods are available when customers order them. By doing this, you will increase business sales and enhance customer sanctification. It may feel like it is an impossible task to know the right amount of stock to hold at a given moment.
Luckily there are many new inventory systems you can implement to execute an accurate inventory of your supplies at tfc.eu.com you’ll find a wide range of logistic systems, designed to offer a flexible management system that suits your specific needs. They provide their customers with superior market knowledge and customer service.Continue reading to see seven practices that will simplify inventory management for your enterprise.
7 Simple Stock Management Methods
Maintain proper inventory data2. Invest in a suitable POS System.3. Establish the minimum inventory level for each item4. Implement the ABC stock management technique5. Analyze your past sales data and predict future demand levels6. Reduce lead time7. Learn how to best handle aging, obsolete and redundant stock
1- Maintain Proper Inventory Data
How do you know you need to reorder a given stock item? The key is to maintain accurate and updated stock records. You can undertake this task manually using a pen and stock cards or you can use a barcode reader and employ computer tools such as spreadsheets to create a digital POS system. The aim is to have accurate inventory data that will guide you on the various actions to take.
2- Invest in a Suitable POS Inventory Management System
You need to track of daily sales level, as this data will help you know the available inventory. To ease this work, you should look for a suitable POS Inventory Management system to get for your enterprise. The system will show sales of a given item and the remaining number in stock. With this information, it is easy to know when to replenish the inventory. To find the perfect POS systems for inventory management here are some of the things to consider:
- Pricing and set up cost- The plan is to see how much you will pay for the tool and if your company can afford it.
- Ease of use- You will aim to review the necessary training to ensure the system’s proper setup. The goal is to ensure zero errors in inventory recording that may lead to the wrong decisions.
- Customization options- Can the system be tailored to suit your company’s inventory monitoring and tracking needs?
- Data analyzing capabilities- Does the system offer comprehensive reports that will help you make smart inventory management decisions.
- Support- With any new technology, you should expect to encounter different challenges when using it. You need to opt to get the POS system from a company that can assure you of timely and reliable support.
3- Establish the Minimum Inventory Level
for Each ItemIt is prudent to have a stock control system that alerts when certain levels are reached. The idea is to know when to reorder it. You need to input these levels on the POS inventory management system to get timely alerts.
4- Implement the ABC Stock Management Technique
Your inventory can be divided into several categories depending on the value and moving rate. The ABC analysis recommends that you have three groups of stock. Each group has features that will aid you in knowing the best way to manage it.
Group A- These are your fastest moving stock items that contribute highest to your profits. The stock-outs of these items will lead to a significant reduction in sales. The importance of these items makes them a priority when handling inventory control. You need to ensure that these products are available in stock at all times.
Group B- These are moderate moving stock commodities that offer an average return to your business. To determine the ideal inventory to maintain for these items, you need to compare the profits you get and the holding cost.
Group C- These are slow-moving inventory items that have a low-profit margin. With these commodities, you can afford to relax your inventory management policies. The reason is that stock out of these products has a minimal impact on your sales revenue.
5- Analyze Your Past Sales Data and Predict Future Demand Level
To ease inventory control, you need to study your sales trends over various periods. The idea is to learn when the demand for certain items is high. To undertake this task, you need to have a POS system that will help you collect and analyze sales data. From the reports, you get you can project likely future sales.You may also need to explore the external factors that impact on the buying behaviours of consumers. For instance, economic uncertainties and political instabilities make people reduce their spending to save money. Due to these things, your sales and demand for the products may be low at these times.
6- Reduce Lead Time
To minimize the inventory you hold, you should discuss how you can reduce lead time with your suppliers. The goal is to get the products as soon as possible, lowering the holding stock. Here are some of the things that can reduce the lead time.
Buy from local suppliers – The distance between your company and supplier with an impact on how long it takes to receive the goods. To expedite the process, you need to weigh the option of buying from nearby suppliers.
Give incentives to your suppliers-You should look for ways of encouraging the suppliers to deliver the items you order on time. For instance, the promise to keep buying from them if they reduce the lead time. Also, you need to make timely payments to the suppliers to improve your relationships and keep them motivated.
Offer the supplier your sales forecasts- The idea is to make it simple for the supplier to predict when you may need stock replenishment. With this information, the supplier will take action to ensure the timely delivery of the goods.
Improve communication with suppliers- Effective communication is critical to building a good relationship with suppliers. Each party should clearly understand the terms of the transaction to avoid inconveniences, such as the delivery of the wrong items or quantity. It is wise to look for how you can integrate inventory control tools with the suppliers’ systems.
7- Learn How to Best Handle Aging, Obsolete and Redundant Stock
The quality of some products deteriorates if you keep them in the storage unit for a long time. It is prudent you have a system where you sell the old stock first. The other thing is to look at the best disposal methods for obsolete and redundant stock. Keeping such items on your inventory is a cost that should be eliminated.
Stock control is, therefore, simple when you learn the best practices to adopt. The goal is to maintain the lowest possible inventory level without increasing the danger of a stock out. You need to look for technologies that can help you achieve this goal. Hence, why you should look for the appropriate POS system to acquire for your enterprise. This tool ease collecting sales data and analyzing it, to decide the optimal stock level to maintain.
Infographic created by WSI, a 3pl distribution company