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inventory management

How Not to Fail at Inventory Management

Regardless of the size of your business, if there is inventory it must be managed correctly from startup or you’ll soon be overwhelmed trying to catch up. This is especially true for companies offering a wide selection of products. Without an effective means to account for the items in your store or warehouse, hours, days, and even weeks can be wasted trying to figure it all out.

Without a good inventory management system, you won’t have control over:

  • Good customer service
  • Accounting accuracy
  • Sales tracking
  • Theft prevention

Letting these areas get out of control is a quick way to fail big-time.

Good Customer Service

If you are not able to keep an accurate tally of your stock, you’ll be left to flounder over customer requests. It will be impossible to tell a customer if you have what they need in stock. With a proper system for inventory management, you can answer customer questions and ensure the products they need are always on hand. Good inventory management equates to good customer service.

Accounting Accuracy

With a solid inventory management system, you can constantly stay updated on what is being sold. Having the ability to print accurate, detailed reports based on what you need to know about the sales being made can go a long way to increasing sales overall.

Sales Tracking

To ensure you are on the right track when stocking inventory, you need to ensure your system will highlight which products are selling like hotcakes and which are hurting your bottom line. This insight will help you to decipher which inventory should keep coming back and which should be discontinued for good.

Theft Prevention

If you are not keeping track of sales versus remaining stock, your customers and even your employees can take advantage of you. Theft prevention is an important part of staying in business but if you are unaware how much stock is supposed to be on the shelves, you are going to lose money.

What You Need to Better Manage Your Inventory

Successfully managing your inventory takes more than just a computer program. There should be a lot of thought put forth when deciding on how you’ll manage the items on your shelf.

Here are five of the most important parts of building a successful inventory management system:

  1. Technology

Technology for managing inventory in today’s times is incredibly progressive compared to just a decade ago. It’s not enough to have a good computer program for managing inventory, you must research your options to find a program that works for YOUR inventory. Not all businesses are created equally and not all computer software work the same. Review carefully the abilities of each technology to see how it fits into your business. Does it offer the reporting you need? Does it provide the data capability to handle your products? Is it the most cost-effective option available?

2. Employee Protocols     

It’s important to choose the right software to manage your inventory but it’s all for not if you don’t have a knowledge staff operating the program. As the technology is integrated into your business, a system of protocols for the human side of the equation also needs to be established. Thorough training needs to be provided to ensure all employees are using the technology correctly for accuracy from the get-go.

3. Accurate Information

Before you can invest in a software management program and train your employees, you need to know the full scope of information that matters. Carefully review all the details necessary to properly maintain your inventory including pricing, SKU information, product variables, inventory counts, and the other details necessary to keep your inventory on point.

4. Consistency

Consistency comes with proper training of employees and continued assurance everyone is doing what is expected of them. If even one employee fails to follow protocol for maintaining inventory, you will never achieve any level of accuracy. Create a flow chart of how inventory is handled – from the initial order, through delivery, up to the time of sale and employee reliable leaders who will ensure the work is done right the first time.

5. Forward Thinking

When establishing the initial inventory management system and protocols, keep an eye on the big picture. Business just starting out especially need to look towards the future. Investing in an inventory management system which will not reasonably grow with your company can cost you lost man-hours and bundles of cash in the near future when you need to make big changes to continue growth.

Build A Better Business with Inventory Control

While it is never too late to re-evaluate and reestablish a proper inventory management system, it is best to get things in order right from the start. Newly-owned businesses need to put a priority on properly managing inventory to ensure they can meet customer demand and know they are selling the right products. Well-established businesses should also take a closer look at the new options available to improve their inventory management and controls. With new technology being invented every day, there may be more effective and more affordable solutions now on the market. Using the same old software for years on end can eventually hurt your bottom line.

 

Let NSA help you improve your inventory management – give us a call or contact us today.