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4 Best Practices to Transform Your Inventory Management Process

What is inventory management? 

Inventory management essentially refers to the efficient management of stock and inventory. In a nutshell, it is all about having the right amount of stock at the right time, right place, right cost, and in the right quantity. However, the entire process is not as easy as it might sound. It involves the use of various inventory management techniques to control and oversee order placements, ensure the appropriate storage of the stock, and controlling the number of products for sale. It can often get challenging for businesses to keep up with inventory demands while monitoring the inventory process and the needs of their workers, customers, or the buyers. Contact US

Inventory management best practices

Track the fast and slow movers

A proven advantage of optimizing inventory management for warehouses is that it can help track sales and orders for each product or customer. These inventory management techniques are extremely useful for companies to gain smart insights into inventory data.  This information can be used to track the high sellers. This way, the entire stock management process becomes more efficient, storage and shipping are performed faster, and companies will not have to worry about this task ever again. This is an ideal inventory management best practice to keep the big clients happy.

Categorize the inventory

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One of the most common inventory management techniques for categorizing the stock is through ABC analysis. This is the technique of arranging the stock into groups that range from the most important to the least important items. A-items typically the best-selling, highest priority stock and require regular reordering and constant quality review. B items are medium-priority stock and usually require monthly reordering. C-items are often low priority goods that are typically carried in high volumes with minimal reordering. Organizing your stock within the warehouse according to how they sell and how much value they bring the business is an important inventory management best practice that will help companies optimize storage space and streamline order fulfillment.

Automation and Mobilizing the workforce

Another inventory management best practice is to liberate the employees from their desks and allow them to perform daily tasks on the go. But employing modern technology for connectivity and cloud-based services it is possible for the staff to monitor and manage the stock levels without physically being present in the office or warehouse. Furthermore, employees might find repetitive tasks to be monotonous. So, companies must look at ways to automate these manual tasks, helping employees to dedicate more time and attention to other core tasks. Such inventory management techniques are also known to improve employee productivity.

Movable and fixed tracking options

Movable and fixed tracking option is an inventory management best practice that allows you to see where a product has been placed, how it can be accessed, and whether it is ready for shipment. Movable tracking provides insights on where items are located at all times, and it makes the entire stock management process faster, easier, and more intuitive.

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4 Inventory Management Best Practices for Retailers

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.

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Categorize inventory

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. 

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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.

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