Back to Basics: 4 Inventory Management Tips to Get Things Under Control

Larry Alton
Larry Alton
Guest Contributor

While the principles of inventory management - accurate forecasting, efficient product flow, adequate inventory turns and stock rotation, good cycle counting, and thorough process auditing – remain rather constant, retailers have new technologies and strategies at their disposal, and researching new approaches can deliver immediate results.

As a retailer, one of the more important responsibilities you have is managing inventory in a manner that keeps your business running without putting an unnecessary burden on your supply chain. Sometimes, this requires you to buck trendy techniques and go back to basics.

Take Control of Your Inventory Management

Inventory management doesn’t seem like much of an issue when you’re first starting out in business. When the orders trickle in, inefficiencies don’t hurt you nearly as bad. You can make up for lost time and create a new game plan on the fly.

The same can’t be said when you scale up and that trickle of orders becomes an around-the-clock onslaught of orders. All is not lost, though. With the following suggestions, you should be able to get your inventory management back on track.

1 – Adopt an Automated Solution

“Efficiency is the name of the game in inventory management, and a manual system simply can’t keep up with an automated system. Items will likely fall through the cracks and get lost, products may not get reordered at the right times or in the right quantities, sales and received goods may not be recorded properly, and typos may be made when writing down data,” explains Boxstorm, an online inventory management solution.

When you stay with an old, outdated system, a lot of problems can arise. By adopting a modern, automated solution, you can improve accuracy and stay ahead of problems.

2 – Fine-Tune Forecasting

Accurate forecasting cuts right to the very heart of inventory management. You can’t be proficient at managing inventory, if you don’t have the ability to predict what sort of inventory levels you’ll need in the coming months and quarters. Using predictive analytics, historical sales figures, and market trends, make sure you’re constantly fine-tuning forecasting, rather than just setting arbitrary numbers and calling it a day.

3 – Improve Auditing Practices

Even with the best automated solutions, there’s still the chance for errors and omissions. Periodically, make sure you go in and actually audit your inventory and reconcile any differences. This will give you a better idea of what’s happening in your warehouse and stores, while also helping you from a finance and accounting perspective.

4 – Don’t Get Stuck in Your Ways

There’s something to be said for going back to the basics and using traditional methods to take control of inventory management, but don’t become so stuck in your ways that you neglect the opportunities you have in front of you. If you’re presented with a chance to make a change that you feel could be rather significant for your organization, hear out the pros and cons and weigh them accordingly.

The principles of inventory management will always be the same. You want accurate forecasting, efficient warehouse flow, adequate inventory turns and stock rotation, good cycle counting, and thorough process auditing. These facts won’t change. What will change are the technology and strategies that you have at your disposal. Always be willing to adopt a new approach, but only after doing thorough research.

Get the New Year Off on the Right Foot

The beginning of a new year marks a fresh start – a fresh opportunity for you to get your business on the right path and moving towards your particular goals. And since most companies spend the first few weeks of a calendar or fiscal year trying to get organized, it would make sense to shift some of your attention to inventory management. In doing so, you’ll put your mind at ease and move your company into a better place.

About the writer:  Larry Alton is an independent business consultant specializing in tech, social media trends, business, and entrepreneurship. Follow him on Twitter @LarryAlton3 and on LinkedIn.

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