The No-Nonsense Guide To Inventory Management
In the business world, inventory management is one of the biggest topics of this decade. Plenty of folks have written books and white papers on the subject. There are countless others that describe, in great detail, about best practices.
We can all read those books and white papers, and watch video seminars on the subject. But the trouble is, digesting all that information can be a difficult process at the best of times!
Are you interested in learning more about inventory management? If so, the following handy no-nonsense guide will walk you through the process. It’s great for busy people, and it helps you get to grips with the subject fast!
# What do you want to know?
Today’s inventory management systems are pretty clever. They can tell you about today’s inventory, and most can even give you historical information on past inventory.
But what they cannot do is manage your inventory without you telling it what you want to know. It is important that you think about what you need to know, so that you can choose the best inventory management system for the job.
# Can you sell what you make?
I am shocked by the number of companies that have vast amounts of stock sitting in their warehouses. Sure, you would expect that stock to go to customers at some stage. But many firms keep old stock in their warehouses for months, even years!
Does your company manufacture products? If so, you need to analyze your sales and stock information for each product. Determine which products sell quicker than others. Keeping stock lying around in the warehouse for ages is bad for your cash flow.
It also takes up valuable space that could get used by products that sell at high volumes on a regular basis.
# The key to keeping the right products in stock
A lot of company owners ask that $64,000 question – what products are the right products to keep in stock?
Many organizations keep most their products in stock “just in case.” The answer to this conundrum is simple, and can get summed-up as follows:
- Don’t keep a lot of items in stock when supply is available;
- Maintain a stock of items where supply becomes limited.
To put it another way: if you can get stock on a next-day basis, don’t keep vast amounts of it in your warehouse. But if it takes a few weeks to reach you, keep plenty in stock. With the latter, only do so if they are popular products!
Keep tabs on your supply chain
If you don’t have any metrics in place to measure your supply chain, you don’t know which areas need addressing!
There are plenty of ways that you can keep tabs on your supply chain. For instance, when you place regular orders for popular products, do they always reach you in time? And how are you tracking those items that take weeks or even months to arrive from the other side of the world?
Now you can set up a useful inventory management system for your organization. Good luck!