One of the keys to a successful business is an efficient inventory management system. Good inventory control is what allows a company to have access to products to sell to customers and the supplies used to create those products. Poor inventory control, on the other hand, can lead to interruptions in the production process and profits lost due to overstock. As Forbes has shown, inventory management problems even plague giant national retailers like Wal-Mart.
If you want to make your business more efficient, you will need to improve your inventory management system. Below are four smart ways to do so.
1. Implement an Inventory Management Platform
To have successful inventory management, you will need to have the tools available to allow your staff to accurately take inventory and track it over time. You are going to need software specifically designed for the task of inventory management. The best software platforms are integrated with mobile apps. That way, employees can use an app to update inventory databases while in the warehouse.
2. Properly Calculate Safety Stock Levels
One of the keys to quality inventory management is being able to maintain the right amount of safety stock. This is extra stock that should be in inventory at all times. If it isn’t, a retailer, for example, won’t be able to sell that product to a customer when the rest of the stock sells out.
However, if safety stock is too high, you will be losing money via overstock that is never sold. Overall, you need to be using smarter calculations to determine how much of each product should be kept in stock at any given time. Certainly implement data for sales forecasts and past trends to get a better idea.
3. Get a Handle on Inventory Shrinkage
In terms of inventory, shrinkage occurs when supplies or products in a warehouse are lost due to environmental damage, damage due to clumsy storage and theft. Sometimes stock is even “lost” just due to the fact that employees can’t remember where it was placed within the warehouse. Make sure you have policies in place to stop all of these occurrences.
For example, having surveillance cameras in place in a warehouse can be a good deterrent to employee theft. Also make sure your warehouse is kept at the proper temperature and humidity to avoid damage to the products and supplies stored within. Employees must also be properly trained on how to store and stack inventory without damaging it.
4. Back Up Inventory Databases
Inventory management can also become disrupted due to the loss of data. Instead of only storing those databases on your own servers, consider also backing up that information in the cloud. That way, all the data pertaining to products or supplies in inventory won’t be lost if a bad storm creates a power surge that takes out your company’s servers. This is more common than you may think. As told in a Washington Times story, even Silicon Valley giant Google recently experienced massive data loss due to an electrical storm that hit one of its facilities.