Do you have questions about how to do good inventory management? We know how important this step is for every business. Still, many shopkeepers do not know what the best actions are in this case, jeopardizing their internal control and the delivery time for customers.
Inventory management involves controlling products’ entry and exit and organizing the goods’ storage place. Through it, the business owner avoids making unnecessary purchases, leaving items unattended and suffering losses.
Increasing control over stock makes it possible to make sales forecasts, project your orders in advance, improve product pricing, and know which items consumers prefer and which are less sold.
If you want to learn the best practices to manage your inventory intelligently, read on and check out some fantastic tips!
What are the benefits of good inventory management?
Good inventory management provides many benefits for your business. This way, you can maximize profitability and achieve financial sustainability. Check below the advantages that can be obtained.
By optimizing inventory management, you have all the possible conditions to reduce disorganization’s costs. This is because it helps to identify bottlenecks in this critical stage of a business.
In addition, waste is reduced, and logistical planning can help improve deliveries and receipts of goods, making expenses at this stage much lower.
Alignment of company’s areas
Having integration between the areas of a business is also essential. And through good logistics management, this becomes more efficient. For example, the productive sectors can measure how much product is being produced, and the sales area knows the output of these items.
Thus, by aligning all areas of the business through this management, you collect relevant information to optimize inventories, guarantee deliveries and obtain advantages for the company, which gains efficiency, and for customers who receive their purchases at the moment. Right.
Improvements in purchasing management
With a more efficient alignment between company’s sectors, it is easier to understand the right moments to make purchases and avoid excess inventory. In addition, it is possible to obtain better conditions with suppliers.
This is all because performing this management efficiently gives you a greater understanding of the needs of the business. Therefore, improvement in acquisition strategies is a great benefit that can boost your establishment’ results.
Having good stock management is fundamental to increasing the efficiency of your company. Through it, it is known when and how much inputs and product are needed to keep everything in perfect working order.
In addition, it optimizes business resources, guaranteeing more financial balance and the possibility of increasing profits. Therefore, it is worth investing in reasonable solutions and adopting measures that help better management.
With cost reduction, more efficiency in inventory management and improvements in business purchases, the maximization of company’s profitability also occurs. In addition, you have better conditions to maintain the business’s financial health.
Therefore, be sure to apply good practices that help in this activity, which is so essential for a company’s success. Through them, it is possible to gain relevance in your market.
How to manage inventory?
Now that you know the importance of this practicality’s time to get your hands dirty and implement some improvements in your business routine. See below the main steps for this.
1. Take and update product inventories
To organize your stock, it is essential to make an inventory of your products and keep it up to date. A list of all items and the amount of each one in a spreadsheet already brings a lot of relevant information.
To facilitate the registration of goods, determine a code for each one and separate the products into categories. This practice makes it much easier to find what you need.
Another fundamental point is to determine a frequency in reviewing and updating your inventory. This practice helps you to be more clear about what you have in your stock, allowing you to make predictions about what will be missing and when to replace the products, for example.
As we are talking about an essential process for your business, it is worth leaving an employee responsible only for stock control. Thus, you avoid mistakes that can harm the entire production chain.
2. Move stopped items
Stalled goods, in addition to taking up space in your inventory, can cause damage. Imagine that you own a restaurant and bought three bags of Australian bread that have been lying around and could end up spoiling.
Therefore, think of actions that help move items without turning. One idea is to do promotions or offer free samples of these products so that customers are interested in buying them.
In the case of the restaurant’s case, why not think of a different recipe that uses these bread? The novelty can attract consumers and still move your stock!
3. Choose suitable suppliers
You do your part, but are your suppliers always late? No matter how well you organize your inventory if your partnership comply with the agreement, they can jeopardize the entire management you’ve built. After all, you organize yourself based on the established deadlines.
Therefore, rely on trusted professionals. So, you know you can count on them, and you don’t run the risk of being let down. Good suppliers can even help you when demand unexpectedly increases and you need to replenish stock quickly .
Building a good relationship with suppliers is key to good inventory management. In fact, here on the blog, we have already published an article with essential tips on how to negotiate with suppliers . It’s worth opening the link to check it out as soon as you finish reading this content.
4. Make calculations and predictions
Do you remember that we told you to register all the entries and exits of your stock? So, with this practice, you can make estimates about the quantity you need to buy each product and when you will need to replenish stock.
Why is it important? Because you plan your purchases better. In this way, you avoid running out of essential goods for your business and not buying unnecessary items that will only take up space in your inventory.
Even with all this control, we know there may be losses. After all, unexpected things happen! Don’t worry: to alleviate this situation, calculate a damage margin. Of course, the ideal is not to lose, but with this limit defined, you increase your inventory control and take measures to stay within the margin.
5. Define the processes
Inventory management works like any operation within a company. Therefore, defining the processes that will guide the procedures is necessary. In addition to avoiding failures, such a definition optimizes team’s time .
Then establish guidelines for inventory control. What should be done once a product is sold? Will the write-off be done immediately, or at the end of the day?
Assemble a flowchart with each step that must be followed in order to manage inventory. Finally, to improve control, establish a periodicity to issue reports on operations.
6. Organize the stock
It may seem obvious, but organizing the space where your products are located is essential in order to increase control over stock. Keep the place clean and make sure items are being stored properly.
This involves temperature and humidity control, for example. If you work with frozen products, separate the products into categories inside the freezer and ensure constant refrigeration of the items.
Another tip, in this case, is to keep the flow of people organized. Establish the times for moving products and define the review dates for the entry and exit of goods.
7. Adopt management software
The technology intends to replace manual actions and streamline processes, saving your team’s time in organizing stock flows. Today, there are several options for inventory management systems to automate activities.
As this tool can be integrated with the purchasing and sales areas, entries and exits are automatically registered, and you have a real-time stock update. With the software, you can record product inventory and create a financial plan for your business, optimizing business management.
8. Design your demand
If your company works with perishable products, it is essential to have an excellent demand projection. Thus, you avoid waste and damage that could compromise the financial health of your business.
For example, a restaurant with a lot of waste will hardly be able to produce a significant profit. Therefore, evaluate the average number of dishes demanded and be prepared for a volume of customers similar to what was estimated.
9. Train your team
Qualifying employees are very important so that there are no errors in inventory management or other business areas. Therefore, it is essential that your team receive guidance from specialists so that they can use all the resources available to carry out their work.
Errors such as lack or excess of products can be avoided when those responsible for stock are aware of company’s needs and maintain clear communication with suppliers.
10. Bet on standardization
A standard for inputting and outputting each item into the system is important to optimize control. Based on this care, you avoid confusion and are clear about the needs to meet all company’s demands .
Also, standardization is helpful in order to keep everything organized. Can you imagine searching for an item in your software without knowing how it is registered? It can be tough, isn’t it?! it’st’s worth investing in this tip!
11. Register entries and exits
Recording what goes in and out of your stock is essential to be clear about what you have available to offer customers. In the same way that the recording of financial movements is relevant, the transfer of goods is also appropriate.
Thus, it is worth betting on a reasonable control of materials to improve their management. Through the use of software, this becomes a little simpler to do. It also helps to understand company characteristics and seasonal periods.
Therefore, write down everything that goes in and out of your stock, as well as the dates of entries and exits, to organize and keep the flow up to date.
12. Track important metrics
The use of indicators allows you to broaden your vision and improve decision-making. In inventory management, metrics are also essential. After all, they help to gain greater efficiency, in addition to helping to identify errors and implement continuous improvements.
Therefore, it is worth looking for the most suitable ones for your business and constantly monitoring them. Several indices can broaden your understanding of this element. For example, you can understand your turnover rate, retention costs, average days to sell products, and out-of-stocks.
13. Choose a replacement model
Choosing the appropriate replacement model can generate great results in your inventory management. You can be more efficient, working with a less costly inventory level through a good selection.
For example, you can choose the continuous methodology to make frequent resets. It is more straightforward and suitable for products with a high added value, significantly impacting the business’s profitability.