Published on March 5th, 2019 | by Sunit Nandi0
7 Inventory Management Techniques For Better Stock Control
Are you an entrepreneur struggling to find inventory management techniques for better stock control?
If yes, we will provide you with answers to all your questions.
Stock control is an integral part of the business. It needs to be managed smartly. This is essential as it helps the business grow better and also cuts down any loss of financial resources.
Listed below are 7 inventory management techniques for better stock control.
1. Appropriate maintenance of stock levels
Stock level should be maintained in the most adequate manner. It should not be less to avoid any loss of sale. It should not be more to avoid wastage.
There are few things you need to keep in mind which stocking inventory.
Keep control of maximum and minimum level.
Keep a track of items sold each day.
Track the fast and slow-moving items.
Track the time period taken by the supplier to send your inventory.
Forecast the purchasing behavior of the customers.
Keep a track on the prevailing market condition for the product you deal in.
Do not over-buy because of discounts and other offers.
….and so on.
2. Keep everything documented
It is a good practice to keep records of each and every action regarding stocks. This will helps you in future for any reference. It will help you prepare better reports.
Keep records of P.O.
Keep records of stock inward.
Keep records of delivery notes.
Keep records of stock moving out.
Keep records of returns.
.. and so on.
3. Apply ABC analysis
In this, A.B.C. stands for Always Better Control.
In order to manage your inventories better, you need to divide them into A, B, and C category.
In the ‘A’ category you should put all the items that are costly. These items include items which are only 10-20 percent of the item in the store. But as they are costly they account to more than 50% of the total inventory value.
Next comes the ‘B’ category. This includes items that are of medium range. It will be roughly 20-30 percent of the store items. It will cost about 30% of the total stock value.
In the ‘C’ category items which are less costly will come. It will be about 70-80 percent of the items. But the total cost will be only 30% of the stock value.
This segregation will help you get a proper idea of the items that are more important and need more attention.
4. Barcodes are a savior
Gone are the days when you do everything by using the traditional method. There are many inventory management software which will help you manage things better.
Among all, you have inventory management software supporting bar code. You just need a barcode scanner along with this software to use this method.
As and when you receive your inventory you can print barcode labels and attach it to your inventory. This is very useful when you deal in large quantity or variety of look-alike products.
Whenever you scan these barcodes, information about that particular inventory automatically comes on your computer/ laptop screen. You do not have to type product information by hands. This helps to save time and also cuts down the error of miss-typing.
5. Track gift, losses and returns properly
In the business many times it happens that you do not make a sale, but the inventory goes out. This happens in case of giving inventory as gifts or if any loss has occurred or when they are returned.
Record any gifting done by you. For this purpose create an account as “Gift” with headings “Item Name” and “Amount”. Whenever you gift an item add the item to this account. On totaling this account you will come to the total amount of inventory gifted.
The above process needs to be carried out for losses also. Losses can be because of theft or other unforeseen circumstances. Create an account with “Losses” heading and “Item Name” and “Amount” underneath it.
Returns also need to be tackled skillfully. As discussed above keep a record of all the documents regarding the return. For this create a separate account in the name “Purchase Returns”.
Your inventory management software will definitely subtract all the above items from your stock and provide you with the exact stock of inventory available.
6. Tracking consignment stock or drop-shipments
Inventories which are to be taken for consignment stock and drop-shipment need to be handled tactfully. Otherwise, it will become a mess and you will be in loss.
In consignment stock, you do not own the inventory. The inventory lies in your suppliers’ warehouse. You also do not pay for the inventory until it is sold. It means the product should not be added to your inventory stock but should be available to be sold to your customers.
The best way to handle it is to add an account with mane “Virtual Inventory”. You can enter all details regarding the inventory in this particular account. Whenever you are making a sale to the customer you can add this to your inventory account and then transfer it to sales account.
Drop-shipment is the products that are shipped from the suppliers directly to your customers. In this system, you can ask the supplier to provide you with the inventory details whenever they purchase an inventory. And also ask them to inform you whenever it moves out from their warehouse, and so on.
7. Inventory stock at 3rd party warehouse
Many a time it happens that you do not own a warehouse. In such a case, you need to keep your inventory at a third party warehouse. This does not mean you will not track your inventory.
In this situation, you need to track inventory as you would do if you keep it in your own warehouse.
Ask the 3rd party to inform you about goods arrive, the stock is taken, any loss occurred, goods going out, and so on.
The above list will definitely help you master your inventory management for better stock control. It will definitely help you leverage the best out your inventory. And you will definitely be able to save your time for other business purposes!!