As you expand your business, there is a need to maintain the approximate quantity of stock at all times. Nowadays, inventory control is a necessity for every business. This involves regularly performing inventory counts to ensure your business stays on top of stock at all levels.
Inventory management is keeping track of your enterprise stock by motoring their dimensions, weight, quantity, and location. The main aim of inventory management is to reduce the cost of holding by knowing when to restock or manufacture other goods.
Here are techniques to ensure you keep your stock at the appropriate quantity as you expand your business.
First In, First Out (FIFO)
In layman’s language, this means that the oldest items should be sold first. It is more important to clear older goods first, especially when dealing with perishable items to prevent spoilage. In addition, it helps you to pay attention to current trends such as new features or packaging design. If you fail to clear old stock on time, it will be daunting to convince customers to buy your items, yet they are packaged in the old design or lack some current features.
Create Par Level
You should start by creating the par levels of your stock, which is basically the minimum quantity of items you should have at any given time. It is essential as it lets you know when to order more items. The par levels can vary from one product to another, depending on the demand of each item. Stocking at par levels will help you avoid the excess stock or stocking fewer items than you need.
While creating par levels, conduct extensive research to know how quickly a particular item sells. Additionally, keep reviewing the market forces so that you can make necessary adjustments on time to prevent losses.
Manage Supplier Relationships
Create a robust relationship with your suppliers. If you utilize supply chain third party logistic solutions, you should maintain regular, proactive communication. The market is quite dynamic, an item could not be selling yesterday, but today it’s on high demand. If you have a good relationship with your third-party logistic provider, you will restock faster to meet the current market.
On the other hand, if suppliers usually deliver your items, a good relationship will enable you to restock fast or return a slow-selling item to avoid dead stock. Also, a good relationship with suppliers means you can inform them when you are expecting an increase in sales so that they can increase production.
With a reliable inventory management system, you can predict future demands, reduce deadstock, and minimize overall costs hence keeping your enterprise profitable at all times.