Every business suffers from stock control and inventory management problems. “Shrinkage” accounts for a considerable amount of total sales that includes theft by customers or employees, or staff and administrative errors. And if you are trying to grow your business, keeping track on stock levels and way you manage your inventory can influence your growth in terms of profit or loss and also your customer satisfaction ability.
Before looking at the tips, you should first understand key goals of inventory management system. When using any inventory control system you should be well aware of the goals it should accomplish. These goals helps you identify the effectiveness of your current system and also if improvement is possible and where and how. These goals are
Once you have an understanding of the goals, your current inventory control system and are looking forward to expanding your business, then here are some tips to reduce shrinkage greatly and thus help you in the stock control process.
Your first focus should be checking on whether the delivered stock is exactly what you ordered from your supplier. Sometimes suppliers get stock orders incorrectly packed and while assuming you have correct numbers you add the inventory to your shelves. In these cases when you receive orders you are liable to get short stocked and thus lose your sales and your credibility as well. In another case you might actually have more stock than needed and you won’t even know when to reduce prices or not order anymore of it.
It is easier to place your stock wherever it fits. But the easy way isn’t always better, as this can make it harder to track the product. And if you have similar products with similar packaging (could differ in quantity or have unnoticeable difference) then while in hurry you or your staff may make a mistake and likely cause errors.
Each product in your stock must have a clear label on it with product number, quantity, basic description including vendor name and other important details. Labelling makes identifying the product much easier. It makes tracking easier as you are always able to know about the box’s contents with its exact quantity. This can also be done using barcodes instead of labels.
If you offer expired products, then you will obviously be liable for hefty fines if the product gets delivered to the customers. So it is important for you to keep track on the best before dates of each product in line so that you can clear the stock before it gets outdated by either lowering the price or any other way. It is also important to check the best before dates of outgoing orders before packing.
If you have made a wrong delivery, then when delivering another product instead make sure to amend the stock levels for both the products. At times, it may seem obvious, but while in all the hassle of running the business, this can easily be overlooked.
Every business has different peak times when the sales increase or decrease with large differences and also each supplier also have their own different lead times. So if you want to keep your business going and want to escape out of stock situations then you should be able to establish how long you can restock normally and forecast the amount of time the minimum stock level will get exhausted. In these cases, you need to keep in account the market seasons and then the fluctuating customer demands. You should ideally have a buffer amount to cover the amount of time that is required for restocking. You are also required to maintain stock of less-demanded products for lowering the transportation costs.
One of the biggest issue surfaces while handling the returns mainly in fashion and electronics markets. If you get any delivered stock returned when they are discovered defective then you have to make sure that your stock levels don’t get adjusted upwards and make sure to account for it with your suppliers.
You should always keep track of your stock in real-time. If you have made or are encountered with an error, then it’s better to point it before taking the order. If not, then you will have to spend time contacting them if an error is spotted later or restocking if you haven’t and in the worst case you fail to deliver and lose your sale with the credibility of your brand.
Keeping track of inventories altogether is time taking and exhausting task. So you should keep your priority straight. Usually, 80% of your demands are generated by only 20% of your products. You should set management operations i.e. forecasting, stock-level check, and reordering of these products as priority. Then make next best selling products next on your list. You can focus on stock tracking accordingly for rest of your stock too.
And then you can always consider using automated solutions for inventory management and controlling of your stock levels. These solutions provide you with a number of tools for assisting you with proper and efficient management of your inventory and keeping you from time consuming but important processes done manually. These can also be a big factor in reducing errors and increasing your productivity. You can also use cloud-based automated solutions for inventory management so that you are always available from wherever you are and whenever needed. These can have considerable impact on your bottom line and allow you to grow faster.
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