Inventory management is the process of controlling all the stocked assets of the company. This involves keeping record of the orders, faults in the system, delivery dates , payment records etc. When an competent inventory management prevails, the best is brought out of the business and it expands very quickly. So, today we are going to learn about the simple yet effective steps you can take to improve your management system by making some upgradations.
➢ Simplify inventory tracking using barcode systems
According to a study, even the most experienced data entry clerk makes an average on one mistake for every 300 keystrokes. To eliminate data entry errors implement electronic data interchange (EDI) and bar code scanning. Automate inventory tracking processes with an inventory system, which will require software and a barcode scanner or mobile computer. On all the inventory paste a 2D barcode label and the status of those items will be received with a simple scan. Using real time updates will avoid shortage or excess of stock and delay in packing or shipping of stock.
➢ Stop using Spreadsheets
Using manual spreadsheets such as Microsoft Excel or Lotus 123 for inventory tracking is an age old process, but then why stop it?
Michael Wohlwend, vice president of SAP Americas, has a reason for that, he told Materials Handling that the use of Excel for inventory tracking is now considered outdated. Old technology can cause potential problems that limit your business’ capacity to grow for several reasons, including: “I no longer have to guess inventory usage and spend hours a day updating spreadsheets.”
So the solution for this is using accounting packages like Quickbooks or Peachtree, they provide various inventory features and also a central database. You can use any inventory control software to lessen your work.
➢ Use First In First Out (FIFO) approach
FIFO is a trusted principle of inventory management. It prevents perishable goods like food, makeup, etc from getting wasted. It is equally important for the non-perishable products because the same boxes which are always kept at the back might get damaged, or outdated and unsellable. So sell your inventory in chronological order, the oldest stock (first-in) gets sold first (first-out). To implement FIFO keep your warehouse organized, keep the new stock at the back and old stock at the front.
➢ Use real time analytics to generate accurate data
Inventory management system provides the feature of real time analytics. It brings a huge amount of information on your fingertips. Now it is up to you how you make this data useful. The digital data helps to make quicker analysis like which products are in high demand, which are the slow moving products or deadstock, prevent excess and lack of products, optimize warehouse organization, etc. So by using all these valuable information, you can plan out your weekly budget and stock purchasing more efficiently.
At any point of time, if any problem occurs, you can immediately identify the problem area using your computer systems and take immediate action to control it.
➢ Pair your inventory management system with a good accounting system
It is very important to keep every product accounted for, from the time order is placed till it is shipped to the customer. It is important to maintain a record for all the pricing information from the time order is placed, the unit price of the product and transportation and packaging costs involved. This way you can keep track of every penny you invest in your business.
➢ Have a backup plan
Last but not the least it is very important to have a backup plan. Systems can get corrupted or hacked, this way data is lost or stolen, so it is extremely to have data backed up from where data can be restored easily. Use a cloud based inventory management system to create a backup and update backup information at end of every day regularly.