Inventory Management Techniques
Are Your Inventory Management Techniques Up To Par?
If you are a business owner, you may know a thing or two about inventory management. The process of overseeing supply and demand is time-consuming, as there’s a delicate balance in understanding that sweet spot where you have just the right amount of inventory for the requirements of your consumers.
Over preparedness means you could be sitting on a heavy load of inventory; you’ve monopolized a good deal of your money, and now you have to wait for your items to sell. This can be quite burdensome on the cashflow of your company. To avoid an error like this one or many others, you’re going to want to put an inventory management system in place.
Here’s how inventory management techniques can ensure the financial health of your business!
It could save you money in the long run
Putting an inventory management system in place can help you save on storage costs. Investing in a warehouse service provider allows you to stock your goods by weight, amount, dimensions, and location. Maintaining the right amount of inventory in a warehouse means you won’t take up unnecessary space with inventory you don’t even need. Proper management also means you’ll avoid overstocking anything that may go out of season or expire. Products with a shelf life could risk expiration if there’s too supply for the demand. The mismanagement of any of these aspects of inventory could significantly drive up your costs when it could have been avoided.
Here’s are some helpful techniques to help with your inventory.
Auditing – With the help of your warehousing provider, getting up-to-date records of your stock is vital. A physical inventory should be done more than once a year when tax season rolls around. If discrepancies do occur, finding the error will be more tedious if you have to work through a year of reporting.
Forecasting – Getting the exact forecast of the demand any given product may not be realistic, but you can get an accurate idea. An understanding of the variables at play is a good place to start. You should consider market trends, seasonal comparisons from previous years, upcoming sales, and more.
First-In-First-Out (FIFO) – This concept addresses the time at which your stock enters the warehouse and when it leaves. The principle here is that whatever has come into the warehouse first should be the first to go, solving issues of perishability, out-of-date merchandise, and more. A well-managed logistics warehousing provider will arrange your stock to facilitate this order.
Set limits – With thorough research, you could determine the levels at which your merchandise needs replenishing. These are the minimum amounts of any given product you should have available in a warehouse. These will vary based on product type, season, and promotional activity. Usually, hovering just above these levels will ensure you’re not stuck with inadequate stock when demand is high.
Managing the intricacies of inventory management could be more manageable by implementing the right techniques, using the right logistics warehousing provider. Econo-Courier can help retailers, manufacturers, resellers, and more with their warehousing needs. Contact us today!