Running out of inventory can be detrimental to your business. Not only is this a quick way to squander business relationships, but it’s also a guaranteed way to frustrate customers and lose their loyalty. Moreover, poor inventory control will cost your business thousands, by hindering manufacturing times, cost effectiveness, and overall production planning.
These three inventory management strategies can help your business run smoother and ensure that you’ll never run out of materials.
Conduct A Formal Inventory
First and foremost, it’s important to conduct a formal inventory. By knowing exactly what materials you have in store, as well as raw materials, work in progress goods, and finished items, you can gain a good perspective on where improvements can be made throughout every stage of production. Ideally, you’ll want to conduct this inventory during a low-point of activity when you will not be interrupted. Check out these step-by-step suggestions for conducting a thorough, formal inventory.
- Divide up your facility into different zones. For example, your zones might be raw materials, spare parts, work-in-progress items, and finished goods. Be sure, however, not to include items that you have yet to put into your inventory or items you’ve already taken out.
- Assign these different sections to the employees that are helping you conduct the inventory. Consider having several people assigned to each section, as this helps maintain the integrity of the data. To add accuracy and efficiency to the process, use a portable data collection device.
- Ensure that each individual understands how to conduct an inventory and what they should be counting. Will items be counted individually or by the dozen? Are you counting bottles or cases? To eliminate confusion, make sure everyone clearly understands their role and duties in the inventory.
- Once the count has been completed, you’ll need to match the counted items up against your system software package. Investigate any discrepancies, and record any adjustments you make for accounting purposes.
Know The Flow
After conducting a formal inventory, you’ll have a better idea of what products are moving and what aren’t. By examining the flow of these products, you can identify what products should be discounted and replaced with faster-selling items. You’ll also see patterns and trends in the sales of high-margin versus low-margin items, as well as overlapping items that aren’t productive.
Once you’ve determined the flow of your inventory, you can evaluate who is responsible for ordering products at the right time. Implementing this type of control over ordering inventory is vital in avoiding running out of a product, or wasting money on over-ordering.
Keep Options Open
It’s not uncommon to shop around for suppliers who can offer better, more affordable options that cater to your inventory trends. Even if you remain with your current supplier, knowing the different pricing and delivery options in your industry can help in negotiation efforts with existing vendors.
At Elite OPS, we have the technology and experience to properly manage your inventory and handle your materials. Our real-time inventory management platform offers your business state-of-the-art custom warehouse management technology, accurate shipment management, first-in, first-out guarantee, complete lot control management, electronic data interchange, product quarantine, and 24/7 visibility via our custom client portal.