4 Tips for Effective Inventory Management
Effective inventory management is one of the hallmarks of a good business. It stands testament to a business’s ability to satisfy its customers, sustain its operations, manage its costs and drive productivity. In this article, we want to share 4 tips for effective inventory management.
1. Build Strong Relations with Suppliers or Vendors
For our first tip, we recommend building strong relations with suppliers or vendors. Suppliers are essential for any business that wants to continue selling products. In some cases, you’ll need their help to deal with a business challenge, such as a looming deadline. Furthermore, great suppliers will improve the quality of service you provide to your customers and help your business run more efficiently.
For example, by cultivating strong relations with suppliers, your business can reduce the risk of delays and quality issues, and you may also get locked in for discounts. However, don’t be afraid to leave problematic or non-performing suppliers since accommodating them may lead to higher costs in the long term.
2. Embrace the 80/20 Rule
The 80/20 rule of thumb states that 80% of your sales or profits will come from 20% of your efforts. If you apply this concept to inventory management, it means that 80% of your profits will be derived from 20% of your product line.
How can this be applied to inventory management? For starters, you want to be decisive about getting rid of dead stock that not only takes up valuable space but also takes time and effort to process. Some ways you can do this include discount offers or bundling dead stock with fast-moving items. Secondly, you want to keep an eye on your customer's behaviour, and introduce changes to your product line accordingly. This will help ensure that you’re only stocking items that are in high demand on time, thus improving your return on investment by avoiding stockouts.
3. Avoid a One-Size-Fits-All Approach
There is no universal way to manage inventory. Every business is unique. What works for you might not work well for others, and this also applies to inventory management.
Inventory challenges can vary from business to business. For example, geopolitical events or differences in technology may affect your business in Singapore differently than businesses in the US. Explore different methods to find what works best for you. Be sure to keep accurate records, and use software to track metrics and generate reports on the performance of each method you try.
4. Invest in Inventory Management Software
Managing inventory with a clipboard, let alone a spreadsheet, is not only tedious and time-consuming, but also risky. If you haven’t already done so, consider investing in an inventory management system or point of sale (POS) system.
The right system will allow you to automate many processes as well as provide insights into how your inventory is performing. Apart from making it easy to operate from multiple locations, this can go a long way in reducing errors, improving efficiency and increasing productivity.
Final Thoughts
Inventory management doesn’t have to take a toll on your time, energy, and resources when software can simplify the process. At Eurostop, we’ve made it our mission to help businesses manage merchandise and business processes with efficiency and ease. Our Enterprise Point of Sale solutions, for example, can help with inventory management, analytics, customer management, international pricing and more. Click here to get a free demo on what our EPOS solutions can do for you.
