Have you thought about these inventory management best practices?

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Inventory management can be a complex activity that can be very tedious to implement and maintain, however the benefits of an inventory management system are endless.

Just as if the wardrobe is the lifeline to your everyday appearance and ability to go out the house looking professional and as if you care, so too is the warehouse to the company. The door of the warehouse can be shut, and all the mess and boxes (unfolded clothes and piles of laundry) can be hidden from sight and banished from mind. However, by lacking an organised method in the warehouse, which enables straightforward stock selection, inventory stock items will get forgotten about, remain unused and unsold, until they are expired or obsolete.

If the warehouse remains untidy with a system that does not promote systematic and accurate storage of items, then it is exceedingly easy to end up in this position where there is copious stock on hand, somewhere, but it is impossible to pick it out quickly when it is needed.

This is the equivalent of not having access to your clothes because they are at the back of the wardrobe in a pile. The correct thing to do would be to take it all out, decide on a storage system so all items of clothes can be rotated regularly so each is worn, and sort and fold all items ready to place back. Likewise, with inventory management, the goal is to have just the right amount on hand with precious little left over that ultimately cost the company in storage costs and may remain unsold.

Get online

A remarkable way of inventory management currently in the business world is to have an automated inventory management system which can either be found online or can be downloaded. The beauty of having an automated and online inventory management system is that all recording processes throughout the manufacture of product can be quickly and accurately executed. Likewise, the data can be accessed and viewed offsite making it very straightforward for a manager for example, to attend conferences overseas while still having access to the company while away.

Trend analysis

Manufacturing inventory management packages can be extremely useful to reflect graphically on sales of other years and seek to understand why they are how they are. The package itself makes the process very quick and painless without the need for tedious data trawling and possible inaccuracies. Another way to analyse trends, particularly in a fast-moving business world such as ours, is to follow fashion trends in the United States for example. In other industries, it may be about reading industry research articles and development of new software so that the company is able to consistently have the best equipment possible and be on the forefoot when it concerns societal preferences.

Categorise inventory and sort out the warehouse

The experts suggest categorisation of inventory stock in the warehouse is vital for a good inventory management system. This requires using a model such as ABC Analysis where the value of items is analysed so that the most valuable items and accounting for most of the sales (Group A) are allocated the larger proportion of the warehouse for storage, while group C (the least valuable items and sold the most infrequently) is allocated the least amount of storage space. Additionally, the inventory stock comprising Group A needs to be in exceptionally tight control where reordering is considered a priority. However, with Groups B and C, the storage space and inventory control does not need to be quite as arduous.

Live and breathe inventory management

Inventory management must be in control for the company to run efficiently, routinely fulfilling customer demands while paying attention to ordering levels and reducing the stored stock onsite. This is a tall ask in reality and can be far more easily attained with online inventory management software. However, successful inventory management is not all attributable to equipment and software but is also dependent on adherence to the system and the desire to continuously improve. Therefore, quality assurance and inventory management should be adopted by all levels of the organisation with an incentive program being a possible future step.

The future of the company must also not be determined by a lack of foresight and dependency on limited facilities for growth and storage. Therefore, it is suggested to plan, plan and plan some more for the company’s future and the direction it wants to take with sales which will affect inventory.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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