It is a journey to achieve that delicate balance of inventory and manage it properly so your business sees the optimal benefits. However, businesses both big and small will all experience a variety of factors affecting inventory management. They always need to look at stock levels and decide if they need more or if it will lead to overstocking. In bigger businesses, there is often a large team of experts who analyse, predict and help make big decisions about inventory. If you are a smaller business, these experts might not be at your disposal.
Luckily, there are a variety of reports that analyse factors affecting inventory management. These reports provide information to help businesses enhance their decision-making skills. Inventory management reports can outline information about current inventory levels and direct businesses owners towards sensible purchases.
Overall inventory performance
In order to truly understand how your business is functioning, it is imperative to understand what products are turning a profit and performing highly for you. There are a multitude of factors affecting inventory management such as inventory turnover, inventory accuracy and item fill rate that can be revealed in this report. For example, by looking closer at inventory turnover, you can assess which products are getting replaced more than others over the course of a specific time frame. If this rate is high, that means it isn’t sitting on the shelf very long and that is it most likely an in-demand product.
By looking at previous sales history and developing patterns, you can anticipate demand and forecast more accurately. When you can anticipate demand, you can plan your inventory levels and management systems to prevent stock-outs or overstocking. When looking at inventory forecasting it is important to hone in on the lead demand time needed for inventory to arrive, the quantity of safety stock and what stock levels indicate that you need to re-order more inventory.
When you look at inventory hits, you are analysing how many times a specific product pops up on an invoice. You can do this by looking at hits over a specific reporting period and see how frequently it appears. This correlates with the product’s holding value and costs. It can show how big of a role it plays in producing profit for the company.
An inventory control report is critical to understanding how much inventory stock you have on hand in the warehouse. These reports help you optimise inventory levels and ensure that you are tracking it properly. There are a variety of methods to gain an inventory control report. Products can have tracking options such as barcodes or radio frequency identification.
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.