An Inventory Management System is not an option anymore; it is fast turning into a basic requirement. Especially in times such as the ones we are going through at present, with the Coronavirus Threat causing Lockdowns, Social Distancing, and Economic Slowdown. Every business, big or small, needs to save every penny earned, and justify every penny spent. Stock should be taken stock of – so that not a single item goes waste. An Inventory Management System can prove to be a complete business solution, if made the right way.
How an Inventory Management System can be created, therefore, is what we are going to discuss here.
A good Inventory Management System results in Improved Cash Flow
One of the basic jobs of an Inventory Management System is to augment the efficiency of your business. To help you in predicting future demand, reduce the time spent by each and every item in your warehouse, and enable you to cut down on wastage.
The basic idea is that you should be having the least amount of money tied up with stock that is unproductive. Money is always to be utilized on those areas of your business that can assure, and fetch you the highest ROI.
What you need to do is Track your Inventory
Tracking your Inventory involves finding out the Inventory that you have, and where you have that. This can be a relatively easy task for small businesses, but as a business begins scaling up, this task can get tougher, and tougher.
While keeping track of Raw Material can be easy, Work In Progress can be slightly difficult to keep a track of. When it comes to Finished Goods, you need to keep a track of them even after they have left your premises.
The ideal Inventory Management Systems are expected to track everything – from Raw Materials, to the delivery of Finished Goods to customers.
One traditional way of tracking stock is Barcode Scanning. There are, of course, other systems -- such as Radio Frequency Identification (RFID) tags – which can prove to be faster, more flexible, and also affordable.
Follow the Demand for your Products
You know demands can change with time. How does the demand for your products alter, as time passes? Or trends change? Having a sound idea of this is the first step to Inventory Management that is efficient.
You can take the help of quality accounting software to get reports related to previous sales. Stock can get adjusted once you have a clear picture of which product rises in popularity during which period of the year.
Your predictions regarding business can get fine-tuned once you understand the market that you are operating within.
Ways to take care of your Inventory
Stock can have immense financial value associated with itself. As such, it needs to be handled with utmost wisdom, and care.
- Restrict the right to order Inventory for your company to a few people only, whose experience, expertise, wisdom, and integrity you can trust.
- Find a profitable way of handling products that do not remain saleable.
- Keep a very careful account of your stock.
- Try to keep a track of the items moving within your company – and without.
- Keep a good system of labeling in place, so as to enable your staff to locate things easily.
- Units of measure should be kept consistent so as to rule away any kind of confusion.
- Make a sensible budget when it comes to funds spent on stock.
- Have a good training plan developed to let new employees understand how the system operates.
- Security has to be in accordance with the value of the items that you have in store.
- Place sprinklers and fire extinguishers strategically.
How a software can assist you
An efficient software can help you with
- Keeping complete track of the entire life cycle of Inventory.
- Keeping account of trends, seasons, and holidays.
- Having indicators in place to inform you when stock approaches a specific level – which should be neither too low, nor too high.
- Realizing what impact the shipping costs have on various items.
- Making allowances for differences that can exist between offline, and online retail. Considering stock turnover, popular days for sale, delivery, etc.
- Incorporating all the information into the workflow of your accounting, and business.
Why you need to use suitable software for your Inventory
You need to have a software in place to support whichever Inventory tracking system you choose to use. Depending on Excel spreadsheets cannot be entirely suitable, since
- Spreadsheets had hardly been designed for the purpose of managing stock.
- There can be a possibility of the entire file getting deleted, or entries getting deleted.
- Backupshave to be made on a regular basis, to keep data loss at bay.
There can be other factors that can prevent spreadsheets from being entirely suitable for the single-handed management of Inventory.
A wise idea would be to have an Inventory Management software in place. It can be better still if this software is tied into the software associated with your accounting.
If you have a cloud-based software, backups and upgrades would be all done for you. You would also be able to manage and check your Inventory at any time, and from anywhere.
After all, managing your Inventory and Procurement with a clear insight can be of paramount importance to your business.
You should be having a software solution that can enable you to know the status of your present stock, demand, and procurement – all in real time. The software solution should also be able to handle multiple warehouses at the same time.
A customized Inventory Management System, therefore, would be the ideal business solution for you. You would be getting exactly what you want, to run your business efficiently.
In case you want to find out more about how you could go about making an Inventory Management System for your business, you are most welcome to discuss your doubts, queries, or ideas with us – in a complimentary consultation, of course. We would be happy to share our information, experience, and expertise with you.
We can also provide you with customized solutions related to Inventory Management System.