One of the most time-consuming tasks in operating a retail store is keeping up with the inventory and following inventory management best practices. This holds true especially for players in the retail industry who do not have a narrow product mix. The chances are that these companies would end up spending a significant chunk of their time tracking their inventory unless they have an efficient inventory management system in place. Though maintaining a good inventory management system calls for hard work and discipline, it aids in meeting the demands of the customers in a timely fashion. Thanks to automation, companies in the retail industry can now be more relaxed about their inventory tracking and management – both offline and online and opt for inventory management best practices. Today something as simple as a smartphone or a handheld device can be used to scan barcoded products as they move in and out of inventory. However, it is important to note that inventory management best practices are also affected by forces outside the company – the more significant economic environment, changing seasons and trends, and resulting fluctuations in demand. Some of these inventory management best practices can be analyzed and predicted, and others are less easily managed. Inventory managers must cooperate more closely across departments: sales, customer service, IT, accounting, manufacturing, etc. Here are some inventory management best practices to help you streamline your business.
ABC analysis is one of the most commonly used methods for categorizing inventory. ABC analysis recognizes that not all items in your inventory are equally important. The goal of ABC analysis is to optimize the use of warehouse space and to ensure that the essential items are always available. Less critical items should take less space, and more space should be used for the items that are high in demand. This is one of the inventory management best practices used by retailers in the industry.
Quick order processing
Slow order processing can cause clutter in inventory management. Install a state-of-the-art order management system to monitor everything related to order processing, starting from the placement of order to shipping the product to the exact customer address. The benefit of quick order processing is that it eliminates the need to send items back to the warehouse. Besides, it allows retailers to keeps tabs on the current inventory status. Furthermore, there’s a proven method to make order processing effective – playing the intermediate between the manufacturer and the consumers. Therefore, quick order processing forms one of the inventory management best practices followed in the retail industry.
Accurate demand forecasting
Demand forecasting is critical in ensuring that even with minimal stock levels, companies do not run out of the needed items. The amount of stock required may fluctuate due to seasonality, the economy, and business trends. To accurately forecast demand, it’s essential to involve both marketing and sales as too much merchandise in the warehouse can tie up more capital in the inventory. This makes demand forecasting one of the inventory management best practices needed for the growth of the retail business.
Differentiate slow-moving and best-sellers
For most companies in the retail industry, some of the items are best-sellers while some are slow-moving. Retailers need to discriminate between them and readjust their inventory management best practices accordingly. Slow-moving items occupy the shelves for a longer period. Such products often eat up space, because of which the supply of fast-moving items fails to match up with the demand. Large businesses can leverage various software solutions that can decipher how much loss the retailer is making due to these slow-moving products. Small companies, on the other hand, must instruct suppliers to deliver freshly produced goods and opt for inventory management best practices to face the competition.
To know more about inventory management best practices for retailers, request a free demo below