Stock Tracking & Inventory Management Best Practices in 2020
It is essential to follow the best practices in inventory management to keep the process transparent and accounting clean. Proper inventory management also helps you get a visibility into your inventory, predict demand better, generation reports and maintains stock & assets in a streamlined manner.
Understanding what best practices to implement in your warehouse can be difficult, this is why we have collected the major pointers from the experts in the industry.
Track turnover rate of inventory
Some products can fly off the shelf, but others can have a long waiting time before being picked up. Undoubtedly, items that keep lying on your shelf add to your overheads and expenses. The best way out here is to drop such products to the manufacturer.
By tracking the turnover rate of a product, you can save valuable shelf space for high-profit products instead.
Amazon, the biggest retailer in the world, for instance, uses a penalizing system. It charges extra from vendors who keep the slow-moving products on the shelf for a long time. This dissuades vendors from misusing the allocated shelf space.
Although having an inventory management software is a necessity, but it is not the answer to protecting your stock and accounts. This is when conducting regular audits to ensure that the quantity of the products is matching with the figures on inventory reports is essential. You can choose to have annual or monthly checks. If you have very high moving products, you can set a frequency that suits your needs.
Utilize various models of inventory
Use vendor managed inventory to let the vendor keep track of your product, and replenish when required. Employ consultants to keep track of your inventory. Based on the volatility of your shelf space, and supply rate – you can analyze what model works the best.
Don’t stick to the antiquated notions of inventory. Modern tools, software are excellent at eliminating a lot of the human error margins and reducing the cost to the business.
Master the processing and fulfilling part .
The biggest pitfall many businesses suffer from is not having a plan for processing and fulfillment. They take in orders they don’t have the capability of handling and that creates a major issue with customer service. Ensure that your inventory values are being adjusted as products leave the door to stay on top of this.
This will always give you a realistic idea of your needs, and the capability to fulfill any order that comes up. You can accordingly ramp up or down on orders from various vendors to keep up with user demand.
Use security measures
A large chunk of products gets lost to clerical errors, theft and manhandling. Ensure that you have security cameras, categorized access to a dedicated team for dedicated products or shelves, and other monitoring tools in place to minimize the margin of errors. Allocating products or shelves to a team will ensure accountability in the people that handle them, creating a responsible environment.
This will ensure that inventory is tracked every step of the way. Security tags will make sure that no one can walk in and out with products without being stopped at the gate. Security cameras are excellent in preventing any theft.
Seasonal products are a great example of why forecasting inventory can save a lot of hassle for the business in the long run. Demands for different products can rise at different times, and you should have dedicated shelf space to handle that. But that is such a counterproductive idea that largely contrasts what we have talked about until now.
The idea is that predicting the demand and storing 1.5 times that amount can help a business. You can do this by analyzing the order history from the previous years.
You must know what high demand products are, and keep them near the shipping area to make them more accessible. This will remove the need for your team to unnecessarily working around the warehouse in securing high demand products.
A lot of time is spent on sourcing the inventory and physically moving them to the place where they can be processed and shipped. Prioritize the vendors who source these items to cut down on manual labor costs and time.
Manage multi-channel fulfillment
The best practices in inventory management aim to make it optimal for businesses to cut down on cost while keeping the standard of customer service intact. Multi-channel marketing is becoming the need of business increasingly.
In a Nutshell
Monitoring and managing inventory, creating a proper ERP system and having the right system for demand management are crucial to the success of a business. There should be collaboration across all sections of the inventory when you are working with a multitude of products. How are you managing inventory in your warehouse. We would love know your thoughts!