Are your staff members still spending 2 weeks to carry out stock-take exercises manually? It is a waste of time and manpower. It also puts your inventory records at risk of human error or in-house theft. With all the advances, there is no excuse for not having inventory management software.
Need for Inventory Management System
Having an inventory management system in your business will streamline your inventory management eliminating human error and saving man-hours. It will provide additional tools that will help you with planning and determining what your customer wants.
The need for an inventory management system can mean the difference between a small business having to close shop or thriving for years. Here are some of the benefits of an inventory management system.
Determine Customer Needs and Forecast Future Requirement
Take the time to review past sales data and spot high or low sales seasons for the different products. It is a tedious process at first, but the resulting information will form the basis of your future forecasts. Better yet, there are plenty of inventory management integrations that are priced to suit small businesses. They take the calculation headache out of your hands. It is worth the investment.
SKUs or barcodes attached to your products can be tracked to keep a record of quantities. This can help you maintain minimum stock levels and avoid stockouts. It can also help you spot cost discrepancies that you can follow up with your supplier.
It goes without saying that monitoring sales will increase the accuracy of your demand predictions. It will also point out the products that don’t move which will inform your next product choices.
Prioritize your Inventory
Categorize your products according to frequent sellers, big-ticket items, and the slow-movers that are still core products. This will make it easier to manage your storage and keep a handle on your working capital.
How to Build an Inventory Management System
Now that you’re convinced that you need to make the jump from pen and paper or mind-numbing spreadsheets, what next? How do you go about setting up your inventory system?
Organize Your Locations
Start by organizing your storage locations. To enable tracking, physically label all the sections, aisles, rows, columns, and shelves. Use every inch of storage space because it’s costing you money anyway.
Describe or Number Your Items
The simplest way to do this is with barcodes. There are free barcode generators online. Alternatively, use a part number that is a kind of code in which each alphanumeric describes something about your product. Whichever option you choose, make sure your product labeling system is as descriptive as possible, separating all the different variations.
Have a clear system for storage containers and the number of products per container. This will make tracking a cinch.
Verify Your Starting Count
Once you have all the above labels, codes, and measurements, input them into your inventory management system. Double-check its accuracy at the beginning. You will be able to trust its output in the future. Once you follow these steps of creating an inventory management system you’re ready to make huge advances in your business.