Achieving Great Inventory Management
Brisbane businesses, whether retail, restaurant, or warehousing, need to be mindful of the importance of inventory management. Having good inventory control reduces the total cost of inventory while maximizing the ability to supply customers with product in a timely manner. However, getting started with managing your inventory can get a bit overwhelming. Worry not, for these tips can set you on the right track in achieving an excellent inventory management system.
Tip #1: Have a ‘rank’ mindset
The general rule of inventory management is concentrating on the things that matter most. And to help you follow that rule, you must understand how ranking your items work. Usually, 80% of your demand and sales are generated by the most popular 20% of your items. With that, start categorizing your items by determining those highest-selling items (A items). Focus your most effort on those types of items by assessing in-stock position, forecasting and reordering more often. Furthermore, your B items are the next highest-selling 30% of items which will normally produce about 10% of sales. The slowest selling or the C items represent a large portion of the things you stock, yet just create 10% of your sales.
Tip #2: Enough is better than too much
Knowing which items to rank can help you determine the right amount of inventory. Too much inventory is costly and damaging to your business. Thus, it is imperative to have projections of the amount of supply you’ll need and when you’ll need it. Consider your regular, past, holidays, and business units sales when making these projections.
Tip #3: Accuracy is the key
Upon determining the right amounts you need, ensure that you actually have the items on hand. It is highly inevitable that you’ll commit items miscounts as you move along the process of order fulfillment, regular pilferage, and receiving. To counter-attack such inaccuracies, invest in electronic data interchange (EDI) and barcode scanning. Paul Huppertz, a logistics expert of a supply chain consulting company based in Atlanta called The Progress Group, recommends implementing a system called “cycle counting.” He suggests businesses owners to “select a few items a day and compare the inventory record to the actual count. Best sellers must be counted more frequently.”
Tip #4: Welcome Innovation
Gone are days of using spreadsheets as your main tool in tracking down your inventory. Spreadsheets are prone to deleting accidents and synchronization problems. Inventory management systems in Australia have upgraded because of software innovation. You can now buy and use licensed inventory software that can give you fast results and central database system. But before you enjoy working on an improved filing system, secure your business with ample warehousing solutions to keep your on-site inventory accessible.
Tip #5: Habit, Have it
Aforementioned tips are nothing without having the right habit. Train your staff to have exemplary management habits such as punctual inventory counts, well-organized paperwork filing, consistent file tracking back-ups, and correct purchase orders. Apply these habits as a long-term goal so you may reap the benefits of good inventory management system. Indeed, inventory management is about self-management.
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