Digital solutions have greatly helped businesses achieve a smoother operation and one of the commonly used ones is inventory management software.
Managing inventories is a big, critical responsibility that can potentially put retail businesses at risk if not done efficiently and effectively. The job primarily focuses on making sure that there are enough stocks that can cater to consumer demands while keeping stock costs under control and regulating the occurrence of overstocking that can also hamper the business’s regular cash flow. A convenient and highly advantageous approach to managing inventories is made possible with the help of an inventory management software as this automates the processes involved in overseeing item flows into and out of the business’s stocks. However, users still play a major role in ensuring that this tool is used at an optimum.
To effectively manage your business inventory, make sure the following areas are carefully looked into:
- Inventory Control
It is highly advisable to have a dedicated team that is responsible for the inventory as this helps ensure point persons who can expertly give a detailed overview of the stocks and inventories. Without an established team, there’s a big chance people won’t hold themselves accountable should inventory irregularities and issues arise and it can consequently screw up the whole inventory process.
As early as in the inventory control phase, inventory management software is already deemed necessary. This kind of digital solution automates most of the processes and by that, it means nearly all processes from logging of stock inflows, stock outflows, inventory count, reports generation, and all that other tasks that take a lot of time when done manually are sped up without compromising the accuracy and integrity of inventory data. As these data serve as a sole basis for inventory-related managerial decisions, a great tool that ensures data accuracy is definitely worth investing in.
However, this digital age has facilitated continuous digital innovation. Hence, it’s impossible not to get overwhelmed by the plethora of options the software industry can present you with. As you choose, as much as possible, choose according to your company’s requirements. More often than not, beginners in the field would easily fall for highly marketed software that usually come with numerous features only to realize that part of the investment went to waste because some of the features were really unnecessary. Do not let these features lure you.
Having a backup system is also important to avoid loss of data if something unfavourable happens to your computer. The good news is, many inventory management software nowadays are already cloud based. This technology basically facilitates storage of data on the web. Thus, wherever you may be, as long as you are connected to the internet, you are still able to access your inventory data while your software provider carries out regular data backup to ensure your data’s integrity.
Besides inventory management software, POS or point of sale systems can also contribute to the streamlining of inventory processes as they automatically monitor sales of finished goods. Should you plan to purchase both, make sure the software you’re going to get are integration-ready. Not all systems have that feature. Without it, either of the systems will not be able to function at their best.
- Ordering Goods
In managing inventories effectively, rule of thumb is to not overspend on particular items. Breaking this rule can significantly erode potential profit; required storage cost is high, damages are subject to big time depreciation, and in the long run, this can disrupt profit from flowing in.
Negotiating and bargaining with the suppliers may also be welcomed depending on the type of suppliers you have. However, if discounts are offered for bulk orders, assessing whether the deal has a potential ROI or not is still necessary before you seal it. If they are up for negotiation and are eager to meet friendly terms, then you should not hesitate to take advantage of that.
Lastly, a FIFO or First In, First Out approach in managing inventories is still the best way to go especially if you are dealing with perishable items.
- Inventory Tracking
A suitable method to track inventories is also a part of the requirement. It might be in a form of visual that can facilitate control. If you have invested in an inventory management software, regardless of the size of stock and speed of goods moving in and out, you do not have to worry too much about this area.
Another perk of using an inventory management software is how it features an accurate tracking of inventories and monitoring of turnaround times. With this, the management can always be certain about the current balance of in-stock items. Nowadays, inventory programs already feature bar-coding and barcode scanning which puts an end to the frequent data entry errors. This also speeds up the inventory count process as inventory team no longer need to carry out manual inventory count on all the items in the warehouse.
Go for an inventory software with a centralized electronic storage as this ensures that all data are preserved and kept accessible to authorized personnel at all times.
Optimization of Stocks
To make the most effective use of your current inventory stocks, here are key points to remember:
Tip #1. Minimum stock level should be clearly defined at all times as this will serve as the reordering point that will trigger your inventory software to notify the management that restocking is already necessary.
Tip #2. Identify which products have to be always in stock.
Tip #3. Do not forget to monitor items that have been presold but are still kept in the warehouse. Once they are removed, you might end up surprised you already have nothing left to meet other demands.
Tip #4. Getting used to ordering the same products may leave you deaf and blind about what is currently trending in the unstable market. A wise move would be to always take market trends into account and base your purchase decisions on these trends. This way you will gain more confidence knowing your incoming stocks will likely sell out quicker or will satisfy the users more.
Tip #5. You can resort to implementing discounts and promos to dispose your old stocks faster. These special deals will help reset your inventory and your clients will be pleased of the potential savings too.
If you want to have a better track of your budget, more so if you want to efficiently manage your company’s operating capital, then part of the requirement is ensuring effective and accurate management of inventories. Implementing this may sound like a long process but don’t worry; with the help of a good inventory management software, it will be a more manageable responsibility