One of the most important aspects of the management of small and medium-sized enterprises is inventory management, understood as a set of processes related to the supply, storage, and availability of goods of an enterprise, to ensure their availability at the lowest possible cost.
We are talking about a concept that covers various aspects, such as registering the quantity, price, and location of products, their rotation, and managing the information received from them. Hence the importance of inventory management in a company and the need to implement mechanisms and strategies to improve it.
Many people think that successful store management requires the right platform, such as Magento and magento web design. But not everything is so simple. These are important elements, but additional resources are needed for successful and stable operations.
Key Strategies for Improving Inventory Management
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Here are some general strategies that are very useful for all types of SMEs and companies:
1. Set the optimal inventory level
This is necessary for the implementation and optimization of all inventory management mechanisms. This concept refers to the point where the amount of inventory does not show the excesses that increase storage costs but also does not show the shortcomings that make it difficult to respond to customer demand. Ideally, determine it based on historical sales and consumer demand data.
Once you determine this metric, you can develop good strategies to improve your inventory management because you know exactly what the ideal quantity of each product is in stock and you can prioritize how to manage them.
It is estimated that 80% of demand comes from 20% of your products. For this reason, you need to make an effort to identify the products with the highest turnover and those that do not usually attract the attention of your customers but are necessary to maintain diversity.
2. Accurately track inventory
Once you have determined your optimal inventory level, you must ensure that it always stays that way. To help you with this complex task, you can implement inventory management software, a tool where you have all the information about the goods that leave or enter the warehouse and it is updated in real-time.
Identify stock shortages and overstocks to request purchase orders promptly and develop sales strategies to get rid of low turnover or expiration date items that are nearing their expiration date.
3. Take inventory periodically
This is one of the best strategies for improving inventory management. Even though you have information about all promotions in the system, there are cases when goods go without accounting (unregistered sale, operator negligence, theft, etc.).
That is why it is necessary to periodically carry out physical accounting, even if it is random, to check the coincidence of actual reserves with registered ones.
4. Rely on e-billing software
Management software is the best of all inventory management engines, but if you integrate it with an electronic invoicing system, you can get better results.
Each time you make a sale and create a corresponding DTE, the inventory system automatically updates the records to clear the inventory of sold items.
It’s about simplifying processes. Invoicing software helps a lot in inventory management even if it is not connected to an inventory system or even if you don’t have an inventory system.
Why? Mostly because the billing software generates a sales and purchases report where you can see which products you have sold and which you have purchased over time. By comparing it to the original stock, you should know on paper which items you have in stock, which you don’t, and which have the highest turnover.
If you don’t already have such software, then it’s time to fix it. It will greatly help to simplify the process of managing inventory and keeping track of the amount of production. To develop such software, you can refer to https://dinarys.com/inventory-management-consulting.