Inventory management is more to what meets the eye. It is more than just ordering stocks and filling up the warehouse. Inventory management takes lucrative skills and planning to make sure you know how to fill up the store. What items need ordering first, and what needs to go in the end? How in advance does the order need placing, and how many suppliers should be a part of your business. All of these aspects make the core of inventory management. If you’re good at it, you will help keep a steady cash flow. However, if you lack the skills for a sound management system, you may lose customers. In the corporate sector, everything is interconnected; everything functions like a domino effect. If you have a good foundation, your business model will stand on a steady structure. So, if you’re looking for ways to improve your inventory management, here’s what we have in store for you:
1. Decide the Product You Need At Hand
Part of your inventory management is deciding how much product you need at hand. It means half of the product will go into the warehouse, and the other half will make up the stock. Generally, items that sell fast need ordering in bulk. Suppose you are a clothing store; maybe your denim jeans are the most popular purchase. If you sell 20 jeans a month, you may need to order 50 jeans monthly to keep up with the sales. However, this may also change according to season. Perhaps consumers may buy more jeans in winter than in summer
2. Take an online course
You can’t ignore the benefits of online learning. It gives you better guidelines on how you should manage your business. With the advancement of technology, e-learning is now more accessible than ever before. Hence, an online course such as a masters degree in logistics and supply chain management online can be a valuable asset to your business. It is way different than trying to find out how to do inventory stocking on your own. You also learn what impacts your inventory, what you need to prepare for, and how much capital needs to go into inventory management. It makes up for crucial knowledge that is important for your business, and you’re much better at handling yourself.
3. Old Products First
You need a system to make sure your entire inventory gets sold. If you only hand out new products and leave older products in storage, their quality will deplete. You will also waste a proportion of your resources in buying these stocks. It is essential if you run a business with perishable items such as dairy products, for instance. It will help if you have an online system such as database software to track when you ordered your stock and its quantity. It will help you divide your inventory better, and you will always end up selling everything on time.
4. Cultivate Relationships
Your suppliers are an essential part of your business. They are the reason why you have a steady consumer base. Your suppliers need to be on the same page as you at all times. Whether you need to return items, restocking much faster than last time, or having a faulty product, they need to adapt to your needs right away. It can only happen when you’re on good terms with them. Make friendly conversations with them, know their operating mode and always pay them on time. If they have trouble delivering to you on time, find out what you can do to facilitate the process instead of picking fights. You should also keep them in a loop if you have an increase or decrease in sales. At the same time, ask them to let you know if they’re running late or behind, so you can find solutions.
5. Back-Up Plan
Inventory management is not as easy as you get stock while the supply goes into your warehouse. There are many issues related to running a business. You can get an unexpected surge in sales that may cause you to sell all your stocks in one go. You may not have enough cash at hand to refill stock right away. Your warehouse may no longer have space, or you may have a decrease in sales. No matter what the situation is, it would help if you had a backup plan. It could either be purchasing an additional smaller warehouse, having an emergency fund or having more than one supplier to help leverage your business.
6. Forecast Your Business
Generally, large businesses often use AI to forecast the industry, but you can do this by following business trends. Study up your quarterly reports and pinpoint what products made the most sales. You should also find out what the market trends look like, such as popular products and what brands are leading in that faction. You may also need to consider your annual growth rate and the current standing of your economy. When you have a comprehensive report in front of you, it can help you plan your next move. Such as what your new ad campaign looks like, what products can become a part of your business, and what you need to discard? Forecasting is vital because, like the consumer mindset, your business also needs to evolve. Stagnant business models are bound to fail, and consumers bounce away from the same products right away.
Wrap Up
Inventory management is essential for your business. It is the cycle that keeps your business going. It would be best to decide how much product goes into the active stock and what goes into the storage. It would also help if you took a course to flourish your knowledge and skills for better management. When you’re restocking, always make sure you get rid of old stock first instead of accidentally hoarding them. Your suppliers are also essential for your business, which means you always need to be on good terms with them and have good communication with them. Finally, every successful company operates on multiple plans. So while you may have a linear plan to run your business, you need alternate routes to switch over to in case of an emergency. Don’t forget to set time aside to forecast your business model.
