It is quite significant to evaluate your business daily so that your business functions accurately. An important regulatory activity is inventory management. It is high time you considered how your inventory helps your small business grow into such a huge one. Were any such products that sold fast? Did you experience any downfall in the business recently? Were there any products that were out of stock? Or did you lose money as there were many products in stock? In this write-up, we’ll explain all of the techniques and give out 7 tips to manage inventory activities effectively and fruitfully.
What is inventory management?
Inventory management is the effective management of the supply chain in which managers try their best to have the correct products in the correct quantity for sale at the appropriate time. When businesses manage their inventory activities effectively, the overall costs of inventory management can be reduced as well. They can rely on technology such as a POS system to help track products in real-time, leads, sales and revenue increase to a great extent.
It’s a fact that only when a business has an effective inventory in place, managers ensure the right product in the appropriate quantity and prevent best-selling products from getting out of stock. With the efficient inventory system, you also ensure that your products get sold in the right amount of time to avoid obsolescence and spoilage.
As a manager of inventory, you must remember that you should never waste a lot of money on the stock. It will not only be a financial risk but it will also fill up your warehouse with unnecessary items. So, inventory management is an important part of all businesses.
Tips to manage inventory activities efficiently
Turn the forecasting system on
Right forecasting is important for the effective operation of your business. Managers should forecast the sale calculations on the basis of such as previous sales figures, estimated growth of the business, promotions, efforts of marketing, any recent change in the market, etc.
When managers forecast estimates of products with the help of an efficient forecasting system, they can ensure that their products never fail in the market.
Utilize the first in, first out (FIFO) method
Managers should sell the products in chronological order in the manner of they have been purchased. This is an important strategy for perishable products such as food & drink, makeup products, and flowers. Food & drink business owners and makeup artists should be cognizant of such a distinct trait of the products that they are offering their customers. It is also one of the best ideas for nonperishable goods as items lingering for an extended period of time lose their quality. Businesses should utilize the FIFO method as one of the meaning tips to manage inventory activities.
Identify the low-turn stock
If there is a stock in your inventory that hasn’t been selling at all or at an inconsiderable rate in the past 6 to 12 months, then it’s high time you figured a way to get rid of it as quickly as possible. Furthermore, you should not stock it once again. Managers must consider strategies for selling low-selling products. All managers should market the product by giving a special discount or promotion to the consumers. In this way, you can eliminate dead stock and intervene in slow-movers efficiently.
Keep in mind that excessive stock occupies your warehouse as well as digital space.
Conduct an audit of the stock
With just a few clicks, you will surely get to know about the score of items in your stock. To make sure that information is correct, managers should conduct an audit on all items available in the stock. This is a critical tip to manage inventory activities properly. Businesses can utilize various strategies such as annual inventory audits and six-month inventory audits.
This audit offers great benefits to the users. For instance, businesses can make a list of best-selling and low-selling products. It assists businesses in keeping a good track of all products available in the inventory.
Use a cloud-based inventory management system
This is an important one among many tips to manage inventory activities. Nowadays, technology is going strong and offering merchants and service providers an extra helping hand to operate their warehouses, especially those that have multi-warehouse inventory. A cloud-based POS system is an ideal solution that assists in keeping a good watch over the stock levels all the time. Such a system alerts you about over-stocking as well as a potential out-of-stock situation so that you can avoid it.
Furthermore, managers must prioritize the expensive products at all times. Inefficient machinery can cost the company a lot in the long run. So, adopting a cloud-based inventory management system also helps identify which equipment pieces that should be repaired and maintained.
Leverage a stock controller
It is impossible for managers to handle all business activities by themselves. A stock controller will be entrusted along with the usage of a well-functioning POS inventory software. It assists him/her in taking good care of the stocks of the company. If best-selling products get out of stock, the stock control will be rendered responsible. Thus, a responsible employee – a stock controller – remains in charge of maintaining the stock levels.
A stock controller also matches all the orders and delivers the right products to consumers. Managers take a sigh when the stock controller is in charge of products.
Categorize the products into ABCs
The last one of today’s tips to manage inventory activities is ABC analysis. You can create multiple categories such as A category, B category, and C category. These categories assist in putting in best-selling, average-selling, and low-selling products. The products will be put into categories according to their values to a business.
The products, that are marked high-selling, make up the smallest percentage but give back greater value to the company. This is the category that retailers should focus on the most. Moreover, they can also come up with different strategies for different categories to ensure profitable inventory management.
Make your business thrive with ConnectPOS
These are some of the best practices that managers should use for the organization and management of inventory. Businesses reap a lot of benefits by making investments in a POS system that has great functionality to help them manage inventory activities properly. And one of the best systems like that is ConnectPOS.
ConnectPOS is a top-class and efficient software that promises to make a business successful through inventory management. It’s a leading cloud-based POS solution for successful inventory management with its advanced technology and pyramid of features.