5 Inventory Management Techniques To Help You Save Money
“Inventory”. This is the most important requirement for the success of any business. What will you sell if you don’t have anything in stock? For large-scale organizations, effective inventory management is a big challenge. A big part of the overall cost is contributed by inventory management and a minor mistake in the process can increase the cost further.
Inventory is not just about counting the available products in the warehouse and noting these to make data; rather it is about the effective stock management to minimize the loss and product damage. Inventory managers also have to strike the right balance to ensure that the stock is neither too less nor too much. Managers can use different online inventory software to minimize the manual labor, but it needs the right implementation of these techniques to get maximum benefits.
To help you save on storage costs, avoid spoilage and improve cash flow, here are five inventory management tips for you.
- First in first out (FIFO)
If you want to minimize the loss caused by the old inventory, you should follow the FIFO approach. This principle says that you should first move out the oldest stock and only touch the newest stock when all the old stock is gone. This is an equally effective technique for both the perishable and non-perishable products. This can be possible only when you have a well-organized warehouse where you keep all the old stock in front, and the new one at the back.
- ABC Analysis
For this you need to classify products in your inventory in different groups and keep the fastest moving products near to the shipping, staging, and receiving area. When you notice a decrease in the demand, just move the product backward and bring forward the items with higher inventory turnover. This can be possible only with an optimized warehouse. It will help you save time wasted on searching for the product in the back.
- Perpetual inventory system management
Also known as an automatic inventory management technique, this gives you better control of the stock. This system keeps you updated with the quantity and value of the stock. This process can be made easier with stores inventory software. This allows you to keep the stock both in the store and the office. You can also use a combination of enterprise resource planning (ERP) and warehouse management system (WMS).
- Regular auditing
No matter how advanced software you are using for warehouse and inventory management, you should perform regular audits to ensure that the reporting is going well. There are different methods to perform regular auditing including physical inventory, spot checking, and cycle counting.
- Invest in inventory optimization technology
The technological advancement has helped people in every sphere of life. There are tools and techniques to ease the inventory management process also. You can use store inventory software to keep a better control of managing your stock. With a little research, you can find a number of options.
If confused, just contact Wise Retail for advanced inventory software. The company understands your business, inventory management requirements, budget and then offers the right match.
About The Author: Varun is a young enthusiastic writer who is energetic and talented. He has a BE and MBA as well as sound analytical and technical skills. He is a blogger and SEO Expert who likes to write on social issues.