Holding inventory ties up a lot of cash. That’s why good inventory management is crucial for growing a company. Just like cash flow, it can make or break your business.
Inventory Management Saves You Money
Good inventory management saves you money in a few critical ways:
If you’re selling a product that has an expiry date (like food or makeup), there’s a very real chance it will go bad if you don’t sell it in time. Solid inventory management helps you avoid unnecessary spoilage.
Avoid Dead Stock
Dead stock is stock that can no longer be sold, but not necessarily because it expired. It could have gone out of season, out of style, or otherwise become irrelevant. By managing your inventory better, you can avoid dead stock.
Save on Storage Costs
Warehousing is often a variable cost, meaning it fluctuates based on how much product you’re storing. When you store too much product at once or end up with a product that’s difficult to sell, your storage costs will go up. Avoiding this will save you money.
A lot of inventory errors can happen at receiving if your inventory management personnel don’t have enough space to work. Avoid giving them a small office at the end of the room. Eliminating receiving errors will relieve you from all kinds of ugly issues later in the selling cycle, like losing time, money, and credibility.
Stock management devices such as bar-code scanners and stock management software can help drastically improve your efficiency and productivity. These tools will help eliminate manual processes so your employees can focus on other, more important areas of the business.
By effectively managing your inventory, you can ensure that you have the right products in the right quantity and avoid products being sold out or funds being tied up in excess stock. Be sure that your perishable products are sold in time to avoid spoilage and prevent your business spending too much money on stock that’s taking up space in a warehouse or stockroom. So how do you avoid the traps of having too much or too little inventory? With inventory management software, of course.
Good inventory management software should:
Reduce costs, improve cash flow and boost your business’s bottom line
Track your inventory in real time
Help you forecast demand
Prevent product and production shortages
Prevent excess stock and too many raw materials
Allow for easy inventory analysis on any device
Be accessible right from your retail point-of-sale (POS) system
Optimise warehouse organisation and precious employee time
Offer quick and painless bar code scanning to speed up intake
Allow for multi location management, tracking inventory across several locations or warehouses
Inventory management is the part of supply chain management that aims to always have the right products in the right quantity for sale, at the right time. In doing this effectively, businesses reduce the costs of carrying excess inventory while maximizing sales. Good inventory management can help you track your inventory in real time to streamline this process.