Effective inventory management is important if you want to run a successful business! Here is what you should and shouldn’t do when managing your inventory!
If you are a business owner you probably find the process of managing your inventory a little bit challenging. Don’t worry as you are not the only one. This is one of the main problems in a lot of businesses. It is not easy to find a balance between the customer demand and having enough stock on hand. And it surely doesn’t help if you don’t have an idea of what type of products you have at your disposal or what is in your inventory.
You will be surprised how many business companies have no idea what they have in their warehouses. You can’t allow yourself that. You have to ensure you have the right products, in the right location, at the right time, and in the right quantity. This is the formula for running a successful business.
In this article, we will discuss effective inventory management or what you should do and shouldn’t do when managing your inventory.
Here is what you should do:
- Monitor your inventory – The first thing you need to do is track what you have got in your warehouse. Find the best way of recording your inventory, the number of products you gave, where each product is located, and when exactly you have received the product.
- Measure performance – It is essential to measure the performance of the inventory management. You need to choose performance measures that make sense for your type of business.
- Adjust inventory management with other processes – Ordering and receiving new products should also consider sales forecasts, customer demand, production needs, financial considerations, distribution, and etc.
Here is what you shouldn’t do:
- Use your inventory as a band-aid – You shouldn’t use your inventory as a band-aid for supplier or operational issues, instead, you need to ask yourself why you have so many products and try to find a suitable solution.
- Get rid of inventory without a plan – If you have a lot of products you don’t need anymore, make a plan on how to get rid of them. Don’t just decide to dump something or liquidate it. Try to find a solution that works best for you.
Inventory management is the key to running a healthy, prosperous, and successful business!