Entrepreneurs who deal mostly with physical products—either by selling them through brick-and-mortar stores or ecommerce outlets—know the value of a dependable inventory management system. At any given time, their inventory keeps them abreast of the following things:
Though it may be easy to gather that information about your own inventory, you must know by now how difficult it is to streamline it. If you’re using more a more traditional method of tracking your inventory, it may not serve you very well in today’s modern times. It may take you hours or even days to take stock of all the product in your possession. By the time you’re done, you’ll still be worried about restocking late, having a shortage of products to sell, or letting old products expire.
If you’re reading this article right now, you probably intend to revamp your current inventory management system for the better. To that end, here are five helpful tips on creating an inventory management system. These new management methods for your inventory will ease the burdens on you and your staff and, most importantly, add more value to your business.
Purchase New Inventory Management Software and Hardware That Suits Your Needs
The first thing you should iron out when building a new inventory management system is what combination of hardware and software you’ll need. In terms of software, it’s possible to find an independent solution exclusively dedicated to inventory management. Or, better yet, you can purchase an all-in-one enterprise resource planning (ERP) suite with an inventory management module included in the package. Ideal hardware may include new computers specifically dedicated to inventory keeping, as well as bar code scanners and printers.
Whatever new hardware or software you choose to buy in the interest of upgrading your inventory management system, make sure it suits your needs. You don’t necessarily need to go overbudget on software spending or fancy new equipment just to improve your inventory. What matters is finding the tools that suit the pace, size, and budget of your company.
Acquaint Your Staff with Any Recently Onboarded Inventory Management Technologies
The next big step in overhauling your inventory management system is teaching your staff how to use your new technologies. Perhaps it’s always been your goal to phase out time-consuming methods for keeping inventory, like writing individual SKUs down or calculating stock using individual spreadsheets. But you will need to properly transition your staff into a new way of doing things.
Little by little, your staff will get used to doing less manual work and become proficient with automated, upscaled technologies. Later on, they’ll be able to spend their hours on more complex issues in the inventory, like whether a product is being overstocked or understocked. That increases their involvement in important work related to the supply chain, like analysis and problem solving. Together, you and your staff will be able to work smarter on your inventory keeping practices, and your revenues will be all the better for it.
Use a Labeling and Stocking System That’s Organized and Easy to Follow
Even as you aspire to get better with the tech-related aspects of inventory management, you shouldn’t forget the physical work of it either. Whenever you upgrade your software and hardware, you should also upgrade your system of operations in your warehouse. Your warehousing staff will benefit greatly from more organized protocols for labeling and stocking products. Aim to make them faster, efficient, and more mobile in their work.
One example of what you can do is to implement a better labeling system for each SKU. Aside from labeling it with the product name and unit of measure, you can also color-code it to designate its shelf in your warehouse. You can further assign particular label colors to areas of your warehouse. For example, all items with yellow labels are perishable labels and should be stocked closest to the warehouse’s exit doors.
Be Conscientious About “First In, First Out”
One of the oldest principles in inventory management is FIFO, which stands for “first in, first out.” The rationale is that the oldest products should be moved out first so that they don’t go stale or aren’t as vulnerable to deterioration. Otherwise, you’ll end up with a lot of lower-quality stock that’s harder to sell.
Your new inventory management system should help you follow the FIFO principle to a tee. Use it to determine which products are spending too much time in the warehouse and have to be moved out ASAP. As with the example above, you can label products with particular barcodes and give a visual cue to your staff about which items need moving.
Set Benchmarks for Your Next Orders to Suppliers
Lastly, use your new inventory management system to prompt you to reorder from suppliers at the right time. It’s not good to wait until stocks hit zero to contact your suppliers again. You can set a benchmark once the product stocks are close to being depleted and have your system notify you when stocks are that low.
Aside from setting benchmarks for low stock, you should also remember to reorder when you anticipate a lot of sales activity. You can set up your system to send notifications near Christmastime, for example, or near Valentine’s Day.
Conclusion: Towards a Smarter and More Functional Inventory Management System
Ultimately, there are a lot of things that a new-and-improved inventory management system can do for you. It can help you manage a variety of products and save time and money from stocking just the right amounts, at just the right time. Hopefully, this article has given you some perspective about how smart inventory keeping practices can improve your revenues.
If you need help procuring a reliable inventory management system for your company, then ANSI is the name to remember. We have been a solid provider of ERP and inventory management solutions in the Philippines for decades, and we’re dedicated to helping our clients grow their business with our innovative business solutions.