When it comes to managing inventory, business owners may run into a “feast or famine” type of situation.
On one hand, they don’t want to buy excessive quantities of items just in case they may need them one day; this can be a costly decision that requires more storage space and they run the risk of having to throw away old inventory. At the same time, owners must have enough products available so that they can meet the needs of their valued customers.
In order to ensure that neither scenario takes place, it is important that business owners have effective inventory control and management systems in place. To help meet this goal, consider the following tips.
Prioritize Every Product
As Business News Daily notes, categorizing inventory into priority groups will help business owners to get a better handle on which items are used the most often and which products tend to sit on the shelves. To do this, divide the entire stockroom into A, B and C groups and then assess each item in your inventory. Costly products that you don’t use frequently can go into the A group, mid-priced goods that your team uses fairly often will be assigned to the B group and the C items are those that are low in cost and are used all of the time. For instance, for an owner of an automotive repair shop, carburetors and engine blocks may be in A, brake pads and linings could go into the B group and containers of oil, air cabin filters and wiper blades are probably in the C group.
Properly Store Everything
Another effective way to control your inventory is by making sure everything is properly stored and easy to access. If certain items end up in the wrong bin or are kept on a shelf that gets too hot, they will not be available for your team to use and may have to be discarded. For instance, automotive shop owners often purchase small o-rings in bulk, usually in a number of sizes. To help organize a large supply of o-rings, each variety should be kept in a well-labeled bin or container that clearly states the size and material from which it is made. To ensure that your supply chain operates smoothly, carefully keep track of how many o-rings are used and order new stock as needed.
Consider an Inventory Management System
Depending on the size of your inventory, you might want to use an inventory management system. While a smaller stockroom could be manually counted by you or other members of your team, inventory management software can help eliminate human error. As Brex notes, an inventory tracking software system will eliminate the need to hand-count every item; spend some time researching available options to find one that is budget-friendly and user-friendly.
Create and Implement an Incoming Inventory Procedure
If you do not already have an incoming inventory management system in place, it is time to create and implement one. This will ensure that each and every person in your company who handles incoming shipments of stock will follow the same standard procedures, including that all boxes have been marked as received, opened to verify the correct products are there and in the right amounts, and then put away in the proper places.
Well-Managed Inventory Reduces Waste, Boosts Profits
Getting your inventory under control may seem daunting at first, but it’s doable. By breaking down the project into manageable chunks, starting with prioritizing your products and then going from there, you will find that your valuable inventory is well-managed and that your company runs smoother than ever.