To effectively control your inventory management, your business will need to track inventory stocks accurately via physical count and accounting records. It will allow you to keep stock at an optimal level and make effective inventory purchase decisions. Here are six tips for improving your inventory control management.
Maintain optimal inventory level
Maintaining an optimal level of inventory is essential for reducing any inventory handling and holding costs, as well as freeing up investment capital. It's best to avoid overstocking, particularly if you are running a small business, as this could put you at risk of an inventory stock-out and could potentially affect the quality of your stock. Keeping the inventory level too low, however, could disrupt business operations, so it's best to implement an optimal ordering system to keep your inventory lean.
Hire an inventory control manager
Hiring a dedicated inventory control manager or delegate this task to a specific person, is one of the ways to improving your inventory control management by preventing your existing staff from being overloaded. An inventory manager would be responsible for all of the business's products that are both in transit and available on the ground, as well as performing adjustments and changes, such as returning orders. An inventory control manager would also be able to make sure that the correct inventory reporting methods are being adhered to, where any inward or outward goods are recorded and tracked.
Establish a tracking system
Most successful businesses have successfully implemented an inventory tracking system that allows them to keep track of turnaround times precisely. These inventory tracking systems can come in a wide range of formats, from computer programs to spreadsheets. By establishing an inventory tracking system, you can organise and manage the productivity levels of your business and take cycle counts in distribution centres or stock rooms.
Ask for supplier assistance
Another way of improving the management of your inventory is by asking your suppliers for assistance. A list managed by suppliers can give vendors access to the inventory data of the distributor, allowing purchase orders to be generated by these suppliers whenever required. Organisations that are distribution-intensive can benefit from supplier-managed inventory control by removing potential errors in data entry to streamline the timing of any purchase orders.
Making sure that incoming inventory is processed efficiently might seem like common sense - but does your business have a standard procedure in place that all employees follow? Or does each member of staff responsible for receiving and processing incoming stock have a different method? Any small discrepancies in this process could lead to confusion in the future when your purchase orders don't align with your data. Make sure that you have a standard procedure in place and ensure that all boxes are checked for accuracy.
Analyse supplier performance
An unreliable and inconsistent supplier can cause some problems for your inventory. So, if you have a supplier that is frequently late or underdelivers or the quality of goods is below standard, it's important to contact them to discuss the issues. If the raised concerns are not resolved promptly be prepared to switch suppliers if necessary.
If you're looking for a business system with built-in inventory management capabilities to improve your business operations, get in touch with our ERP software experts at WinMan today.