Choosing an appropriate inventory management technique is not a straightforward process. Likewise, as your business grows, the more complex your inventory management techniques become. To be safer, you must set a strong foundation at the start. For some companies, having a mix of different inventory management strategies can yield better results. Know when to use independent strategies and when to opt for a mix of strategies. Read on to find out the inventory management techniques that’ll ensure your business stays on top:
Inventory Cycle Counting
This strategy involves taking stock of only a reasonable amount of inventory on certain days. With this technique, you must not take a complete stocktake manually. This technique is effective in helping you test how accurately you take your records. You can compare your records against the actual stock. This manual process is tedious and time-consuming. It may not be accurate as you may duplicate some counts.
Luckily, you can use electronic modes to fasten this cycle counting process. To achieve this, procurement officers at MrPeasy recommend that you choose e-procurement management strategies. Such techniques may involve the use of secure inventory management software to speed up stocktaking. Such software can enable you to add stock manually and import from CSV as you would require. Good use of this strategy can foster your customer relationships.it can help you give the customers what they want when they want. It can also help you keep your inventory costs low.
This method takes advantage of the notion that shipping goods, in large quantities, is cheaper. Therefore, if your company deals with goods that have a higher customer demand, consider this method. You must however have some extra money for warehousing. Purchasing goods in bulk is also more profitable and you can save on shopping costs.
ABC Inventory Management Technique
This strategy is quite interesting and involves you arranging your goods in their order of importance. Your A value will represent the most valued good while C shall represent the good you least value. Remember that different products have unique values. Therefore, you must pay attention to the most popular items. Similarly, ABC inventory management is more suitable for use on annual consumption units. You can also arrange your products based on their cost significance and inventory value.
The inventory management tactic involves a company deciding to take orders and receive payments for the products the company has run out of stock. This means that as soon as you realize that you’ve run out of stock for a single item, you can create an order for the item. You can also inform your customer when you’ll receive the back ordered item. Backorders can increase your sales. You can also use this strategy to avoid the losses you would suffer from overstocking goods especially when you are a small retailer. Consequently, your clients can order goods even when they are not in stock.
There are different inventory management techniques you can use to have your business rank highly. Such strategies like drop shopping, inventory cycle counting, and bulk shopping can help you save on shipping costs and help you deliver goods when clients need them the most. Backorders, the Just In Time inventory, and the ABC inventory management tactics can also help you only stock what you need at a particular time. You can also combine the ABC management strategy with the bulk shopping strategy.