Online shopping is a massive industry that is only continuing to expand, and more businesses are being created now than ever before. However, to run a successful business, good inventory management is imperative for your long-term success. The good news is that managing an inventory is easier than ever before. Here are some best practice tips that can help boost your business towards a brighter future.

Use ABC Analysis to Categorize Your Inventory Management

Categorize Your Inventory

When it comes to inventory management, the correct organization is the key to success, so it is important that you choose the right technique for categorizing your inventory. One of the most popular techniques is called ABC Analysis, which involves categorizing stock into different levels, or hierarchies, to arrange it from most important to least important items.

In this model, items marked A would be the best sellers, the stock that has the highest priority, and the stock that requires careful management and regular quality review. These items might receive a bi-weekly or even daily review. Items in the B category are less important but still need regular management. These are typically items that require a monthly review. Finally, items in the C category would encompass low-priority items that are typically carried in huge volumes where orders are fulfilled every few months.

Choose the Right Tools for the Job

For small businesses or startups, manual inventory management may seem like a good idea. However, the process can be tedious and challenging, even for businesses with a relatively small inventory, and you are always at risk of human error. Thanks to advances in technology, several software options are now available that use advanced computer math modeling that can take the hassle out of the whole process.

From demand forecasting to monthly updates of inventory levels, advanced supply chain inventory optimization software can do it all, and far more efficiently than a stock controller could do on their own. Using software to assist in managing your inventory can save your business time and lower the risk of mistakes and errors, saving you money in the process.

Train Your Staff for Success

Practices for Inventory Management

Once your team has the right tools to perform their task efficiently, they should receive regular training to keep them up to date on the latest methods and updates to the software they are using. And, thanks to the impact of the COVID pandemic, virtual learning opportunities are now more abundant than ever. Virtual training seminars can help equip your staff with the skills and knowledge they need to be more efficient. And, because they can do the training from the comfort of their office, you won’t need to worry about additional expenses such as travel costs and accommodation for longer seminars that may have hindered your budget in the past.

Streamline Your Quality Control Processes

Quality control, or QA, is an essential aspect of running any business that relies on the sale of goods. The longevity of your business depends on the satisfaction of your customers, so quality control is not an aspect any business can afford to skimp on. It is therefore imperative that any QA issues are dealt with as they are discovered. Keeping up to date on QA processes and best practices is essential if you want to stay ahead of the curve, so always be on the lookout for ways to streamline your QA process.

Up Your Efficiency with Well-Structured Stock Takes

Stocktaking is one of the most hated and time-consuming tasks known to stock controllers. Taking steps to ensure that your stock take goes smoothly can both alleviate some of the strain on your staff and ensure an accurate count is performed on your stock. A well-structured stock take will be scheduled during a time when there is the least amount of impact on your business operations.

Improve Inventory Management

Before the stock take begins, make sure that the stock area is clean and organized, to make counting easier, and inform the counters of exactly how they should be counting and how best they should record their results. Finally, don’t leave any room for guesswork. Only stock that has been physically counted should be marked off. No exceptions.

Consider a Vendor-Managed Approach

If inventory management is something your business struggles with, then it may be wise to consider adopting a different approach. Vendor-managed inventory, or VMI, is growing in popularity as businesses look for ways to streamline their processes and cut back on the amount of stock they need to physically carry themselves. With this model, a business provides its supplier with all the information necessary for the vendor to take on the role of managing stock supplies. Not only does this result in lower inventory levels for the business, which won’t be at risk of overstocking, but it also all but eliminates the chances of an item becoming out of stock, which can impact sales.

While this model can be beneficial for both the business and the supplier, it should be noted that there are some downsides as well. Because a single supplier is in charge of inventory, the business will not be able to shop around for better pricing, so a good relationship between the two organizations is necessary to ensure it remains a win-win situation for both.

Conclusion

The correct management of your inventory will benefit your business in various ways and could help save you both time and money. So, whether you are a budding business that is just getting started, or you own an established business and you are looking to upgrade your system, be sure to take a look at these best practices for inventory management and improve your bottom line today.

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