Changing Your Inventory Management Habits for the Success of Your Small Business.
Proper Inventory Management Should Not Depend Entirely on the Use of Software Platforms
Savvy small business owners know well the significance of inventory management.
And while there are many perks to this approach, there's only one rule of thumb; never rely entirely on computerized maintenance management systems (CMMS). Overdependence on Inventory monitoring software can do serious harm to your business.
To shed more light on the matter, this blog post discusses the many things IMS can do for your company. Proper Inventory management leads to business success.
1. Ensures Inventory Balance.
Proper inventory management can help you work out how much inventory your business needs. That way, you get the upper hand— and the ability to avoid product shortages, while keeping around just enough stock for your needs (and not too much).
Plus, inventory monitoring ensures you know where your essential equipment and machine parts are stored, which is vital in helping you get back up and running as soon as possible in case of equipment failure.
2. Leads to Repeat Customers.
Proactive inventory management leads to every retailer's desire – repeat buying. Don't you want that list of hard-earned clients to turn into regular shoppers and make your store their first stop whenever they are in need?
One way to convert prospects into frequent customers and retain them is to make sure you always have the items they're searching for every time they visit.
3. Allows you plan as per your demand curve.
Keeping track of your inventory makes sure you are flexible enough to bend with the demand curve—which means you can set up equipment to increase production during high seasons and use only what you need when sales are low. This is important in making sure you don't miss out on profits and also get to meet customers' demands.
4. Promotes appropriate staffing.
Analyzing your business's order histories and maintenance schedules allows you to make accurate predictions about the number of staff and working-hours you can expect during different times of the year.
That way, you can schedule your team appropriately instead of having extra workers that you don't need around. In some cases, you may experience unprecedented staff shortage, especially when sales go up without your anticipation.
5. Tracks Inventory Turnover.
Your inventory turnover ratio should stay high to ensure your products do not spoil, get obsolete, or eat up your working capital. Work out the number of times (in a year) your inventory sells and spot areas where you can improve resource utilization.
It helps to keep track of your inventory turnover which can help you determine whether you are spending more on machines for fewer returns or vice versa. By comparing margin vs. markup, you can tell whether your firm is headed in the correct direction.
6. Helps you organize your Warehouse.
If you've studied and discovered your top-selling products and the combinations your customers love to order, use the information to organize your Warehouse.
Keep the items you need most close together, in easy to access location to speed up the collection, packing, and shipping processes. Warehouse organization is one way to stay ahead of your competitors, and effective inventory management is one way to achieve it.
7. Increases Staff Efficiency.
Motivate and empower your staff to help with inventory monitoring and management. The use of inventory management systems and practices assists in streamlining business operations.
Routine Inventory Activities can begin and end without affecting the quality of service that the client receives. Using IMS also allows for reallocation of tasks such that no person is overworked at any time.
In this way, the efficiency of the workflow goes up. The staff morale is also boosted since people with large tasks get assistance and finish them on time.
Training workers to use inventory management software, barcode scanners, and other tools is an excellent way to help them make good use of their time and improve resource utilization in your business premises, both technological and human.
8. Avoid Lawsuits and Regulatory Fines.
A disorganized warehouse can land you in problems with the authorities as it may cause safety hazards, which can end up in lawsuits, injury, and fines linked to breaching regulatory laws. Plus, managing your inventory correctly (which entails keeping records of all activities) helps you document all your actions in case of any of the above situations.
9. Fosters Planned Inventory Orders.
If you keep track of how much inventory your business has on hand, you can make wiser decisions about what and when to place orders. Inventory management software enables you to accelerate the ordering process which gets you ready for increased demands.
10. Flexible Inventory tracking for multiple locations.
Within firms, inventories differ in size and number, especially in businesses with more than one physical location. You can apply an inventory control system in any size of business, whether big or small. Such flexibility ensures that different stores can run simultaneously without issues.
Inventory management is critical for businesses with various sites because owners need to organize supplies at each branch depending on the market and many other factors. Dealing with several areas can be confusing without proper monitoring.
11. You save on time.
Inventory management saves you a lot of time. Time is a crucial factor that is not easy to manage and plan for. Effective time management is vital in ensuring the end goals of a business are met before the set deadlines.
Applying appropriate inventory management makes it possible to approximate the time when the stock will end, and you can easily make plans to replenish it.
Monitoring all the items you have (on hand and order) saves you the hassle of conducting inventory recounts to confirm whether you have accurate records. You can store these kinds of data with the help of inventory management software.
12. You cut on Costs.
Money is an essential resource within any venture. Most projects aim at making a profit; this makes money a necessary part of the task process. Wastage of money is one of the worst things that can happen if you don't conduct proper inventory management.
However, if you conduct this technique well, the money will be used as per the requirement, and there will be no misuse or misappropriation.
Ensuring your inventory is in harmony with your facilities makes sure to cut on many unnecessary costs and save a lot of money. Inventory management is the only way you can spot slow-moving money-wasting products, so you decide on a way forward for the benefit of your company.
You also cut on expenses involved with the lawsuits you may suffer due to poor management, and reduce spending on payroll and machine hires during low seasons.
13. Access to Real-Time Data.
The manual system provides accurate and up to date data as per the last count. But a centralized inventory management system can help the team pull a report immediately and review the number of units on the floor, the sold-out number, and the fastest-selling products.
Project Management Techniques You Can Employ to Ensure Proper Inventory Management.
Project management is a type of career where a person applies and implements his/her knowledge and abilities to plan, manage, budget, control, and making sure projects are successful, and they attain the set goals.
In most projects, a manager has to collect, organize, and execute several components of the venture. Inventory and resource management are critical parts of any venture. Businesses dealing with physical products, in particular, have to keep a close track of their stock.
Project management techniques can save you the hassle associated with continuous inventory management. When you think of Stock Management as a project, you can use your skills to finish the job quickly and effectively.
Skills such as critical thinking and decision making prove beneficial at such times. You will be able to organize your inventory and utilize robust administration skills in monitoring and analyzing changes in your stock. Here are the five best techniques you can use to ensure you make successful inventory administration:
1. Plan Accordingly.
Planning is the core of the work done by a project manager. Planning helps in ensuring that you know what you need to buy and where to buy them. The best businesses partner with multiple suppliers to help replenish their inventory if the need arises.
It is also important to research suppliers to determine which one has the best offers. You can find suppliers with cheap quality products by conducting market research. Such planning goes a long way in reducing costs and saving time during inventory procurement.
2. Conduct Inventory Research.
Conducting research is of the leading project management techniques that can be used during inventory management. As a project manager, you must keep track of your existing inventory. Learn what is available and the items you might need to procure.
3. Conduct Risk Assessment and Management Procedures.
Risk assessment and management are crucial project management techniques. Such methods should also come into play during your purchase planning. Assessing risks helps to identify things that could go wrong. Obstacles like coronavirus, lousy weather, or bad timing can hinder your activities.
Risk management helps in coming up with solutions in case the risks happen. For example, during the ongoing COVID-19 pandemic, you may also decide to shop for stock online if the physical shops are closed. Such measures can help streamline business operations and ensure that your inventory management process runs smoothly with minimal hitches.
4. Identify Suitable Tools and Implement.
Nowadays, you can easily buy or rent proper inventory management software. Such software comes with several tools that streamline the management of a venture's stock. IMS offers partial and full automation options whereby you can control the software or give it instructions to perform functions autonomously.
Inventory management tools can even interrelate with other project administration systems such as Order management and tracking. You can combine it with other software to ensure optimal inventory administration.
5. Formulate a Small Team to Track and Control Inventory.
Managing the inventory of a larger project or several projects can be a daunting task. You may need to formulate a team of two or three people to assist you. As a project manager, you should be able to take charge and coordinate all activities.
You should be able to use your leadership skills to ensure all inventory administration end on time. Such project management methods help to ensure that your inventory management teams are productive and effective.
More Inventory Management Tips for Project and Business Managers.
Since managing inventory helps in streamlining project and business management, it is only wise to choose the best tips to employ.
Here are the leading tips for proper inventory management that can simplify the task and improve the workflow of the procurement and supply process:
Define and Recognize the Limits of Your Inventory.
It is one of the preliminary steps that you should take in the process of inventory management. It is vital to know what the inventory should entail, its requirements, as well as its objectives.
Once there is a clear picture of what the inventory should contain and what is lacking, you can easily monitor and manage it. It will be easier to know what items and resources you require and what you do not necessarily require in the inventory.
- Allocate Enough and Appropriate Storage Units for Your Stock.
You can't store equipment and products if you lack a storage unit. Once you identify the requirements of your inventory, the next logical step is to identify the location and Warehouse to store the stock. Since some items are scarce, it is best to identify those essentials and ensure they are available before the venture starts.
- A Proper Inventory Management Process Should be Progressive.
Continuous monitoring and control of the inventory are essential in streamlining business operations. It is never wise to wait until the depletion of the stock so that you can start the procurement process. Setting up a stock administration plan makes it possible to procure high demand items without any hassle, ensuring there is a continuous supply.
If you procrastinate this process, it is quite easy to find yourself in a serious predicament. It may even lead to a halt in business activities leading to losses or a drop in profit margins.
- Make Use of Software Tools in Resource Allocation.
Nowadays, several software systems can help streamline business management, especially when it comes to inventory management. Such software systems may be on a computer or online on a website.
These tools offer a well-organized stock administration plan as well as a schedule that can be edited by the end-user. You can organize the stock to allow for more accessible storage and retrieval of items. You can do this by just clicking on the tool.
All these project management tools vary in price and features that are available. It is best to review all the options and choose the best option that meets your needs.
- Ensure That You Do Not Underuse or Overuse the Available Storage Space.
During inventory assessment and management, you can easily underutilize or overutilize your storage space. The latter is more common and often as a result of poor planning. It can lead to a lack of inventory space and a reduction in the efficiency of the activities.
Underutilization of storages is not a common occurrence; however, it is still an issue. When you don't make full use of the Warehouse, there may be a loss of finances as well as workflow efficiency. You can prevent these two issues by creating a robust inventory management plan and relocating storage places when the need arises.
As a project manager, there is no daunting task that you cannot tackle. If you have the appropriate tools, it is possible to plan and execute an action plan. By utilizing critical project management skills, it is possible to formulate an effective inventory management plan.
With the current technological advancements, you can also procure and IMS tool that integrates software and physical components into a single platform. A proactive inventory management tool is a vital component that touches almost all aspects of business success.
With a proper inventory management system in place, your managers and staff can work strategically in their production, warehousing, and order processing activities while avoiding mistakes that could cost your company a fortune and its reputable name.