A warehouse is the heart of every business. It is where all the back-end work of manufacturing or distributing unit is carried out. A business owner who has complete control over the operations and management here wins half the battle in the competitive market.
However, it is important to evaluate this facility from time to time in order to ensure that you are on track to success. One of the integral aspects to look into is inventory.
Inventory management is the most crucial piece of businesses’ profitability. The organizations that don’t take an effective approach to do so are unable to meet the variations in customers’ expectations, often resulting in warding off a significant portion of the lot.
When it comes to stocking the inventory, every business follows different practices. Some keep little inventory, and many go the ‘overstocking’ way. Both the situations pose risks for businesses; which is why warehouse owners have to find a midway out between these two extremes to flourish.
Therefore, before you tackle inventory of your facility, put in your well-researched thoughts and planning and derive a detailed process. Keep into consideration these tips for your long-term success –
- Delegate Responsibility
The first thing to do is to appoint a person who is specifically dedicated to the role of an inventory manager. That will allow you to get a clear overview of your goods in the warehouse. Such a person will give you quick evaluation of stock that are on hand and in transit, and help devise inventory reporting strategies as well.
You can make your management process far easier and efficient by setting ‘par levels’ for all your items. These levels will help you keep the minimum amount of products stocked in the warehouse at all times, and the moment the stock dips below, you will know it is time to restock. However, with conditions changing from time to time, your reorder levels may vary.
- Prioritize the Inventory
Warehousing experts suggest categorizing your entire inventory into priority groups such as A, B, and C. Items in group A can be high-value items with a low frequency of sales, in group B can be low-value items with a high frequency of sales, and in group C can be moderate value items with a moderate frequency of sales. All this will allow you to understand what product requires the most attention.
- Track Product Information
You have to make sure that you have proper information about every single item in your inventory. This includes product SKUs, nutrition fact tables, name of suppliers, countries of origin and a lot of other numbers. Keep a record of these with the help of inventory management software and a barcode scanner. Avoid manual keying to reduce your load and error.
- Practice FIFO
‘First in, first out’ is a vital principle of inventory management. It means the products should be sold in the same chronological order as they were purchased or created. That applies to both perishable and non-perishable goods because if they sit around for too long, they might become damaged or expired and hence, unsellable.