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Helpful Inventory Control Methods And Techniques

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Inventory Control Methods

It takes research, time, and experience for small business owners to learn the best inventory control methods for their specific businesses. Sometimes, learning from experience can be costly, so there’s a lot to be said for research. It can also help to take inventory control techniques notes while you’re learning about the newest methods and how they incorporate advances in software technology. Or, if you’d rather not take notes, just type “methods of inventory control pdf” or “techniques of inventory control pdf” into your internet search engine and print out a few of the resulting documents. You’re sure to learn about more stock control methods than you ever realized existed. Inventory control is the process of managing a company’s inventory levels. Today’s ecommerce entrepreneurs often have multiple warehouses in several locations. While this is a wise strategy for reducing shipping distance and costs, it can also be a challenge to keep track of it all. Sellers have to know where their inventory is from the time they scan it into their inventory until the minute it’s delivered at a customer's doorstep. Hopefully, you’ll never have to have a fire sale for outdated or expired merchandise. Inventory control means making sure you have the right amount of both your most popular products and your most and least expensive products to maintain optimum cash flow. Data analytics, forecasting, and automation are all great tools that can help meet that challenge. SKUs and barcoding makes both multi-location inventory control and multichannel inventory management easier. Real-time inventory tracking gives you the accurate information you need to make the best business decision possible. It’s essential for reducing fulfillment errors when you’re selling on multiple channels. You can pre-set inventory levels to alert you when a product gets below a certain level, which also gives you greater control over your lead time.

What Is Inventory Management?

While there are several types of inventory management strategies, the inventory management process always has the same goals. One of those goals is to keep stock low enough to avoid excess storage fees, yet high enough to satisfy customer demand. Unexpected expenses that can result from keeping too much stock at a warehouse or distribution center include extra labor and storage fees, transportation, handling fees, insurance and taxes. If it’s there too long, there could also be shrinkage or depreciation, lowering the value of your merchandise. That’s something no accountant wants to have to work with at the end of the year. Relying on old technology like spreadsheets and manual processes like data entry instead of taking advantage of technology can result in costing you more money than it saves. An overbuy or running out of a popular item due to an inaccurate data entry or a wrong item number typed onto a purchase order can cost you some of the customers you’ve worked so hard to attract. The ability to see and access inventory across multiple locations reduces errors and decreases carrying costs. It also enables you to make smart ordering decisions. Inventory management systems are often able to integrate with other software systems like point of sale, shipping software, and other types of software commonly used in ecommerce. While piecing a software system together is a step up from spreadsheets and manual data entry, it can become problematic. One reason for that is that companies often purposely upgrade their products to make them incompatible with competing companies offering the same type of software. When that happens, your team really has to scramble to find a solution before customers are affected. Planned investment is always better for maintaining cash flow than unexpected expenses. Investing in a fully integrated, scalable system can help you increase speed and efficiency and reduce expenses without creating any unexpected new ones.

Importance Of Inventory Management

It’s a good idea to prioritize the importance of inventory management for your own type of business. The reasons why inventory management is important for a business that manufactures goods are likely to be different from why it’s important for someone with a drop-shipping business. Whatever type of business you have, though, the functions of inventory management remain essentially the same. Inventory management serves to reduce storage costs and dead stock and increase cash flow, profits, and customer satisfaction. Once you’ve listed your own priorities, along with some of the methods and techniques you’d like to implement, you can build your own “importance of inventory management pdf “ and print it out for yourself and your employees. It’s important that your entire team, no matter how big or small your company is, understand why inventory management is important in supply chain economics. The more fully they understand the objectives of inventory management, the more likely they will be to contribute their own ideas towards developing and improving it. Investing in a little education and prior planning can save you from some or all of the following common pitfalls:

  • Mis-shipments due to incorrectly entered product item numbers
  • Out of stocks due to a lack of data analytics showing which items were most likely to be hot sellers
  • Overstocks caused by an error in manual data entry
  • Mis-picks caused by disorganized shelf labels or incorrect pick lists

These potentially costly mistakes can be all but eliminated with the right integrated software system. Bar-scanning capability, automation, and real-time inventory tracking are game-changers when it comes to increasing the speed and efficiency of inventory management. Add pick and pack and kitting and bundling and the ability to print shipping labels either individually or in batches and the game isn’t just changed, you’ve got a whole new game.

How To Improve Inventory Management

Once you’ve thought about how to improve your inventory management, it’s time to do some research to create a company inventory management techniques pdf. So, what are the 3 major inventory management techniques? Well, that all depends on who you ask. If you google “tools and techniques of inventory management, you’re guaranteed to get a few million hits. The trick is narrowing them down to those that can be applied to your specific type of business. You might decide on one method or a combination of a few of the top twenty. These include EOQ (economic order quantity), ABC analysis, JIT (just-in-time), and batch tracking, just to name a few. Once you’ve decided on what techniques would best suit your business, it’s time to start thinking about what tools you’ll need to help you put those techniques into action. Luckily, there are comprehensive software systems like Ordoro that already contain all of the inventory management tools that small business owners need. Designed especially for ecommerce, Ordoro’s tools of inventory management include SKU creation and scanning capability that automatically adjusts your inventory in real-time with every sale or purchase. According to Forbes, the teamwork approach is really helpful when making the transition to automation. Even though it requires an investment of both time and money, it results in higher accuracy in fulfilling customer orders and fewer returns. That means greater savings in shipping costs and greater profitability. Some business owners offer employees bonuses for meeting inventory goals. Knowing your employees is the best way to determine what bonuses or prizes they’d most like to win for meeting their error-free fulfillment goals. Unlike Ordoro, your employees don’t work 24/7 behind the scenes, with no need for breaks, pay, or appreciation. When it comes to rewarding your team members, one size does not fit all. They’ll thank you for transforming their data entry time spent interacting with customers, which is a lot more enjoyable—and a good way to keep your business growing.

Inventory Management System

The best inventory management system is one that’s a component of a fully integrated system designed so that all its moving parts work together efficiently. Scheduling a demo is a great way to see some great inventory management system examples in action. The last thing anyone wants is to find and spend the time learning to use, some great stand-alone inventory management software only to find that it’s incompatible with their shipping software. Ordoro integrates every component that all the small business owners they surveyed told their developers and engineers they most needed. That means seamless multi-channel integration with multiple sales partners like Amazon, eBay, and Shopify, as well as multiple shipping carriers, from multiple storefronts—all from one platform. If you want some great inventory management system examples based on your specific business, you can schedule a demo. Once you’ve seen what it can do for yourself, they provide a free 30-day onboarding to help you customize all its features and set automation rules that reflect your business’s needs and priorities. Customization means you decide what level your stock should reach before alerting you that it’s time for a re-order. You decide whether to print your shipping labels in batches or individually. You also remain in charge of how and whether to kit and bundle your merchandise for maximum benefit in reducing storage costs and maintaining cash flow to take advantage of the next new trend. With Ordoro’s data analytics and real-time automatic inventory adjustments, you’ll always know exactly what your best-selling items are, where they’re stored, and how many you have available. There’s a reason Ordoro was voted best inventory management software for small businesses. They’re so sure that your business will grow with Ordoro that they made it fully scalable and provide lifetime support so you don’t have to buy anything new when your business has a growth spurt. Investing in Ordoro now can ensure that you have more resources to invest in life later.