When you are a new entrepreneur and have just recently set up your new business, proper organisation of your stock is important. It is imperative to note that the transition from a small business unit to a big one is a line that consists of inventory management. How you manage your goods and stock might well be the deciding factor in how successfully your business works. Stock loss can be caused by a number of factors including theft and administrative errors. Because of its ability to directly affect sales, you need to look for ways that lead to better inventory management. The first thought which comes to mind is a good stock management software, however, a Stock Management System is not just the software; it’s the processes around the software which are important. Here are some ideas to enhance your stock management process:
The first point of checking your stock is upon receipt of goods from your supplier. It is essential to make note of the stock you receive and cross-check against the list of requirements you placed with your supplier. It is better to check it here than issues arising while dealing with a customer at the point of sale.
Storing your stock
Because of a lack of space and labour, we tend to stack our stock in an unorganised manner. This means, we keep the goods wherever they fit and they might later pose to be a problem when you are bringing them out according to customer requirements. In order to avoid this chaos, it is better to organise your warehouse. Put shelf numbers and row numbers where possible.
Categorising your stock is an essential component of inventory management. Why is this so? This is because when you have to bring out the goods, you should be aware of the order in which you have kept them. This would include proper nomenclature, colour coding the items or placing them in a particular order. For Food Industry, this also means you should keep your chilled, frozen and ambient products in their appropriate warehouse location.
Expiration of products
If you are dealing with products that come with an expiration date, you have to be even more particular with your stock. Removing goods after the ‘“ best before date” might bring in severe consequences or challenges. Thus, it is better to keep track of the expiration dates. When you know your stock is approaching its best before date, it is best to sell them off even at slightly subsidised rates and keep your inventory updated.
Keep your records updated
This might seem like a very simple and obvious factor, however, this is more important than what you might think. If you are delivering any order to your customer from your stock, ensure that the number is recorded in your books. It often happens that due to rush records important issues can be overlooked, but if you overlook any record it is going to cause issues in the future.
Give yourself a buffer period
The whole process of your business runs from collecting stock from your supplier and then selling the goods to your customer. Now, a proper balance has to be maintained between the two processes in order to facilitate smooth functioning. Once your stock starts depleting due to high sales, you will need to give your inventory a buffer period, within which the supplier will provide the goods. This should be maintained carefully.
Wilson EOQ Model
The size of your inventory is also an important consideration when it comes to stock management. Ford W. Harrison developed an excellent theory that gives you an idea of what the ideal size should be for your inventory, based on your business. Read More About it here.
Make use of technology
One interesting gift of technology to retailers dealing with customers has been the addition of barcoding. Scanning the barcode makes your work easier and simpler. Also, when dealing with big orders, this can significantly reduce errors and lead to smoother business transactions.
Another aspect of stock management is handling the returns. This is particularly present in the fashion and electronics industry when the customers tend to return a lot of items. When you are catering to the returns and restocking, make sure all the categories, nomenclature and labels are well maintained.
Regular checks and rechecks
Lastly, there is nothing more foolproof than conducting regular checks of your stock. It might not always be possible to go through all the goods, but at least maintain a cycle and conduct routine checks alternatively on the packages.Managing an inventory at your warehouse might be a tricky process to deal with, that’s when you need a stock management system. An excellent stock management system can help you in managing inventory, improve performance, provide total traceability and clean reporting along with an array of other advantages. If you are facing trouble in managing your inventory, it is high time that you think about implementing a proper stock management system at your place!