How To Manage Inventory Effectively
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1 How To Manage Inventory Effectively
Tips for Retailers to Manage Inventory Better
Inventory management is one of the most important parts for a retail business, paying attention to your sales data and inventory details is very important for the smooth running of your business operations. The purpose of inventory control is to balance between adequate stocks and over-stocks. The stock created by a business unit at a particular point should be sufficient to meet production requirements so that uninterrupted production flow can be maintained at all times.
Here are some top list management techniques for entrepreneurs:
1. Use a barcode reader
• Keeping track of inventory is a cumbersome task. These days it is very difficult to keep record of inventory flow without any software. There should be a proper record keeping system for all stocks. Using a bar code reader for the inflow and outflow of stocks is one of the best inventory management techniques that anyone can choose.
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• EAN / UPC is printed on most products, the barcode reader device can scan the EAN or UPC and connect the inventory to the software to which it is connected. This way you will be able to see the entire list on your computer screen with just one click. A similar procedure should be followed for any outflow of inventory. This way retailers will be able to see current on-hand inventory at any time.
• With inventory management, daily sales reports can be generated with available data. You have to subtract today’s opening stock with tomorrow’s opening stock, the day you receive the sales number.
2. Inventory Racking System
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• Retailers may not place the entire inventory on a pallet. It needs to be separated into specified areas and that too with proper labeling. For example – daily household items such as bread, biscuits, chips are placed near the counter in the grocery store because they are spoiled and sold out very quickly. Desi ghee will be kept on a separate rack as it does not come out often.inventory management software
• Labelling racks and pallets helps create a separate section for similar products. This way you will know at the time of ordering which items are placed where and the picking and packaging will be done more efficiently.
Separation of stock proves to be the top inventory management technique because:
A. Saves time in picking and packing products.
B. One can easily find out which items need to be rearranged only by looking at the specified section.
C. Popular FIFO (first in first out) inventory systems can be easily executed.
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3. Improvement in stock ordering
To ensure proper inventory management, ordering the right products keeping in mind the needs of its customers is unavoidable. For this, it is important to keep an eye on how the products are moving and to see how customers are interacting with your goods. For example, the average normal use of material component A is 50 units per week.
4. Physical Stock Check
• With barcode readers and proper inventory systems, the retailer can perform inventory management very effectively. There will be no problem in searching:
o Inventory on hand list
o The best selling products
o Reorder products
o Slow moving products
• Regular checks on physical stocks are necessary to ensure that the software matches with the actual inventory status. There may be a situation when the retailer forgets to mark the incoming stock by barcode and it will not appear in the software, while the stock is physically available in the store. Similarly, any omissions in scanning of the external supply may show inventory in the software, but will not be physically available. The creation of a robust inventory management technique checklist to meet the entire requirement of physical stock checking will help resolve this issue.
• The best inventory management technique to overcome such a situation would be physical stock checking. There is no doubt that the activity may take some time but is well worth the effort. Monthly physical stock checks should be a regular practice for a retailer who wants to do the best inventory management technique.
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5. Know the minimum stock level
It indicates ‘how much less the stock.’ Each business institution should set the minimum level of stock required. This material is the lowest level of stock, which must be kept on hand at all times so that there is no stagnation in production due to unavailability of stock. Suppose that the average normal time to receive an order from the supplier to the stores, called lead time, is 5 weeks. Here, the minimum stock level to be maintained at all times for material A would be 450 units – (50 units × 5) = 200 units.
6. Know the maximum stock level of the business
Then it is important to determine the maximum level of stock for a particular business. It shows how much the stock is’ This is the highest level for any quantity .