Inventory management is one of the most important parts for a retail business Paying attention to your sales data and inventory details is very crucial for the smooth running of your business operations. The objective of inventory control is to strike a balance between sufficient stock and over-stock. The stock maintained by a business entity at a particular point in time should be sufficient to meet the production requirements so that uninterrupted production flow can be maintained at all times. Here are some top inventory management techniques for entrepreneurs:
1. Use Barcode Reader
- Keeping track of inventory is a cumbersome job. These days it is very difficult to keep a record of inventory flow without any software. There must be a proper record-keeping system for all the stock one is holding. Using a bar code reader for inflow and outflow of the stock is one of the best inventory management techniques one can opt for.
- There are EAN/UPCs printed on most of the products, barcode reader device can scan the EAN or UPC and adds the inventory to the software it is linked to. This way you’ll be able to see the entire inventory on your computer screen with just a single click. For any outflow of inventory similar process should be followed. This way the retailer will be able to see the current on-hand inventory at any point in time.
- Along with inventory management, daily sales reports can be generated with the available data. You just need to subtract today’s opening stock with yesterday’s opening stock you’ll get the sales numbers for the day.
- Retailers cannot keep the entire inventory on a single pallet. It needs to be segregated to the designated areas and that too with proper labeling. For example ’ in grocery store daily household items like bread, biscuits, chips are kept near the counter as they are perishable and sell out very quickly. Desi Ghee will be kept on a separate rack as it doesn’t move out that frequently.
- Labeling the racks and pallets helps in creating a separate section for similar products. This way at the time of order you will know which items are placed where and picking & packaging will be done more efficiently.
A. Saves time in picking and packing of the products.B. One can easily find out which items need reordering by just looking at the designated section.C. Popular FIFO (First in First Out) inventory system can be easily executed.3. Improve stock ordering
Ordering the right products by keeping your customers’ needs in mind is indispensable to ensure proper inventory management. For this, it is important to keep an eye on how products are moving and to observe how customers are interacting with your merchandise. For example, the average normal usage of a material component A is 50 units per week.4. Physical Stock Check
- With barcode readers and Proper Inventory Systems, the retailer can do inventory management very effectively. There won’t be any issues finding:
On hand inventory?
The bestselling products?
Products to be reordered?
- Regular check on the physical stock is required to make sure the inventory showing in the software matches with the actual inventory status. There could be a situation when the retailer forgets to mark the inward stock by barcode and it will not show up in the software, whereas the stock is physically available in the store. Similarly, any miss in the scanning of outward supply can show the inventory in the software but won’t be available physically. Building a strong inventory management technique checklist to fulfill the complete requirement of physical stock checking will help in resolving this issue.
- To overcome such a situation the best inventory management technique would be physical stock check. No doubt it can be a little time taking activity but is worth the effort. The monthly physical stock check should be a regular practice for a retailer who wants to do the best inventory management technique.
5. Know the Minimum Stock LevelIt signifies ’at least how much to stock’. Every business entity must determine the minimum level of stock required by it. It is the lowest level of material stock, which must be maintained in hand at all times so that there is no stoppage of production due to the non-availability of stock. Suppose the average normal time taken to get an order from supplier to the stores, known as lead time, is 5 weeks. Here, the minimum stock level that must be maintained all the time for material A would be 450 units ’ (50 units ’ 5) = 200 units. 6. Know Maximum Stock Level of the business
It is important to then determine the maximum level of stock for a particular business. It signifies ’up to how much to stock’. It is the highest level of quantity for any material/inventory item which can be held in stock at any time. Any quantity of stock beyond this level leads to an extra amount of expenditure due to the engagement of funds, cost of storage, obsolescence, etc.