How To Improve Inventory Management
Maintaining the right level of inventory in your business is an art. Overstocking can lead to spoilage and losses. You might not be able to deliver the order promptly if adequate inventory is not maintained. Use the following tips to improve inventory management:
Use a real-time app: Use a real-time app to manage inventory. This will let everyone know the correct status.
Avoid Overstocking: Overstocking is a criminal waste of money. Money does not come as easy as returns from Ethereum code Ltd’s app.
Don’t treat every product the same: Differentiate the products based on their value and demand. Instead of maintaining uniform stock levels, the raw materials of highly popular and demanded products can be stocked more.
Supplier: Always observe your suppliers. Ensure that you maintain a good relationship with your supplier. This will result in few advantages like prompt supply, ordering goods at short notice etc.
Track market demand-supply: Track the market trend. Past data can help in predicting future demand patterns. Observe demand during festival period and identify peak and slack seasons. You can risk stocking more during peak season and under-stock during the dull period.
Slow moving and obsolete goods: Mark all the slow-moving and obsolete goods. You can maintain low stocks of the same. According you can invest more in stocking fast moving goods.
Update records promptly: Update the inventory usage immediately without missing out any transaction.
Better communication: Ensure that all the concerned teams have access to the inventory level information. This will avoid confusion and production bottlenecks. Set up a perfect communication methodology and coordination between production and purchase departments.
Reorder levels: Set a reorder level for every item of inventory. This will ensure replenishment of stock with enough cushion. If reorder is done before exhausting the full stock, then delay time due to waiting of stock arrival can be avoided.
Conduct regular stock checks: Always check the stocks by verifying physically at regular intervals. Surprise checks can be done to ensure quality and to reduce malpractices in the storage venue. Make sure to have a good security system for preventing theft.
Techniques: Use appropriate techniques for stockings like ABC technique and FIFO. ABC technique is nothing but categorizing the inventory based on their value and importance. Inventory ranked as A will be of more value than B.
FIFO is nothing but ‘First in first out’. Ensure that the lot of inventory which is bought first is used up first. Otherwise, it will lead to piling up of old stock.