Inventory management is being in control of a company’s stocked goods. Most of the resources of a business including cash are tied to it. So, effective inventory management is crucial for the company’s growth. In short, it can make or break your business.
Inventory management is also about monitoring the weight, dimensions, amounts, and location of the goods. The goal of inventory management is to minimize the cost of holding inventory by helping business owners know when it’s time to replenish products or buy more materials to manufacture them.
Why is it important?
Effective inventory management is vital in ensuring that a business has enough stock on hand to meet the demands of their customers. If it is not handled properly, it can lead to loss of money on potential sales that can’t be filled or wasted money due to overstocking.
- To help avoid unnecessary spoilage
With effective inventory management, perishable goods like food or products that has an expiry date such as makeup will be handled more efficiently and significant loss can be avoided.
- To prevent deadstock
There are lots of reasons why products cannot be sold anymore aside from them being expired. It can be because it has gone out of season, out of style, or otherwise become irrelevant. But with proper handling of inventory, you can come up with a strategy that will make you prepared for these kinds of situations.
- To keep storage costs low
Storage costs soar high once you put too much product at once or end up with items that are difficult to sell. If you have effective inventory management, you’ll be easily aware of this. It means you can plan to avoid it and can keep your storage costs at a minimum.
How can you start being wise with your inventory management?
If you think an effective inventory management is what you need for your business, the first thing you have to do is to audit your current situation based on where your business is currently and where you want it to be. Think about the inventory challenges that might come along the way.
You also have to assess your technological capabilities and its efficicency to cater the amount of inventory you have. You can even consider an inventory tracking system if you don’t have one. But keep in mind that you only need it after having a certain level of inventory otherwise there might be other tools that might be better for your business.
Warehouse Management System
A warehouse management system (WMS) allows you to monitor what’s going on across multiple warehouses, regardless of whey they are. It also gives you the control to your inventory and warehouse operations, like receiving, supply chain management, fulfillment, distribution, and many more.
What do you need to improve inventory management?
The answer is simple. What you need is a system that centralizes all your data from all channels in real-time, so your decision making can be faster. In case there is an urgent scenario that needs to be acted on immediately. There are many available Inventory Management Systems online that can use with functions such as monitoring stock, generation of purchase orders, forecast demand, and many more.