Inventory is probably the most important part of any business, regardless of its size and volume. You might be running a small, medium or enterprise-level business. No matter what, you should have sufficient control over how the inventory works and how your organization is benefitted in the long run.
To do so, you need something called inventory management — for which you may need some tools/services as well.
In this article, we’ve covered the top inventory management essentials every firm should follow. These tips will have an impact on the overall productivity, profits and sustainability of your organization, regardless of the industry you’re competing in.
#1 Understand Inventory Management
You may have understood the ways how inventory management defined the process, but that’s not enough. It’s essential to choose the right type of inventory management for your organization, considering the size, type and the sole purpose of using such a tool. The most important aspect of consideration should be how you want to serve the customer. Depending on the delivery philosophy you follow, you can choose between just-in-time Inventory and Perpetual Delivery. The idea is to keep everything updated and on sync so that it is easy to access everything, anytime.
#2 Proper Planning
Probably the most important aspect of inventory management is planning itself. You should understand the ongoing trends in your organization, including the demand for your products. Depending on this, as well as the prediction from data-analytics sector, you should plan how you want to manage raw materials, control the speed of production and make changes to the ongoing process. Things would be awesome if you already have implemented Six Sigma or Lean for process optimization, since you would have made the process faster and smoother as you can.
#3 Easy Tracking and Updates
An inventory that cannot be easily tracked and updated is a bad inventory indeed. This is where you should make use of an inventory management software. Of course, you will have to input the data for the first time, but further changes are like a piece of cake. It does not matter where you are, you can make real-time edits to the inventory data. At any point of time, you would know how much products, raw materials or resources are left at your disposal. When you are running a huge business, this knowledge is more than important. In other words, a software can get you rid of one of the biggest nightmares.
#4 Arrangement Matters
As we said, you can choose between different types of inventory management philosophies, especially when it comes to production terms. Nevertheless, it’s important to arrange the material in an effective way as well — and you’ve got options here. There is something called the ABC method, where your products are basically categorized and arranged. This method is suitable for bigger organizations with a wide variety of products. If you are too big, on the other hand, you need a proper algorithm for faster management, like the ones used in the likes of Amazon warehouses.
#5 Comprehensive Reporting
While real-time data access is important, comprehensive reporting features are also important. Reports do play an important role when it comes to process optimization in inventories. The idea is to understand how the current inventory management philosophy is affecting your organization’s productivity and the way how customers are served. Based on this observation, you can consider shifting or optimization. Just so you know, you should keep updating your philosophy of management depending on the growth of the size. You cannot run a 1-Million company and 1-Billion company inventory with the same process. Optimization matters.
Following these essentials can make it really easy to manage your organization’s inventory. Just make sure that you have the right software support at your disposal — starting from an inventory tracker.