Inventory management is a simple process of storing, using, and ordering a company’s inventory. It includes spare parts, finished goods, and warehousing of goods. Inventory Control and management help keep a record of which and how much stock is necessary at a particular time. When inventory is sold, it is generated in revenue, but it is tied up in cash before it is kept in stock. Hence having too much stock can reduce your cash flow. A good inventory control system leads to a good turnover. Having a poor inventory system can lead to dead stock.
Inventory Control and management are vital to the company because it reduces the risk of stock out, helps to make sure the stock is neither excessive nor less in the company and limits the risk of mismanaging stocks. The benefit of stock is that it saves money by how much and where your stock is stored. It helps maintain a balance between buying and selling goods and improves cash flow when spending money on inventory. You keep cash moving throughout the business. Inventory Control also helps to develop a loyal customer base as the customer receives items without waiting to restock.
Inventory management is never fun, but it slowly changes to science. From technology to simple tips, business owners should know a little saving technique for inventory management. Here are five great tricks to save cost and money in inventory control and management:
● Realistic projection: Look at the item sold and remember crunching the numbers. Crunching numbers gives you details about the stock of the last year and helps you to be ready for the future. For example, you sold 100 umbrellas since last year. There are probably chances you need it this year too. The minimum stock you need in your godown should be 100 umbrellas, which may apply to all seasonal goods.
Research says you should be aware of the population of your vicinity every season and stock accordingly. In the rainy season, you need raincoats and umbrellas, and in Diwali, you need lights and diyas to decorate your house
● Inventory software: Suppose you choose to use technology in your business using software to manage your inventory, a good start. Evergreen is an application that not only helps you to keep track of distributors but only helps you to predict orders. Evergreen is a platform that helps simplify your pricing calculation based on the size of the business; thus, you save time and money from the lengthy calculation.
● “A” items: Statistics show that 80% of demand is generated from only 20% of your items. Focus on your bestseller items but do not forget to introduce new products to your inventory. ”A items” are the items that show the most profitable products. Review forecasts and re-order these products again and again. The next highest-selling item is the “B item,” which comprises approximately 10% of your sales. Hence you need to rely on your A items more than B items.
● Always have a backup: A computer cannot always be reliable. Always have your inventory management into a backup storage device. The backup can be on the clouds like Google drive to save the data. Thus you do not have to worry about losing the data of your Inventory Control system.
● Classify your items: Some items need more attention than others. So you can divide more need and attention than others depending on sales and cost hence you can divide your products into categories like:
○ Product with the high cost and lesser sales
○ Product with both moderate cost and sales
○ Product with less cost and higher sales
Items with high cost and fewer sales will need extra attention because they need special care. Otherwise, the goods will be damaged, whereas, less cost and higher sales would not need more attention as they would not be there in the godown for too long.
Inventory Control and management is a simple process of storing, using, ordering a company’s inventory. This place includes spare parts, finished goods, and warehousing of goods. Inventory management helps to keep a record of which and how much stock is needed at the time. A good inventory system is a good inventory turnover. Having a poor inventory system can lead to dead stock. These points will help you save time and money in stock inventory management.
Fashinza is a B2B apparel manufacturing platform. We help clothing brands to manufacture their awesome collections by connecting them with suppliers. Our chief offering is our platform using which brands can place an order, track it, receive daily production updates, communicate with manufacturers, and make payment. Brands can use our platform to place manufacturing orders for their collections and have them delivered, with options to track, communicate, and make payments along the way. We make the apparel manufacturing process hassle-free, fast, and transparent for the brands.