Business
How to Streamline Your Inventory Tracking Process
Inventory management is something that’s hard to get right in business. You must manage physical products, track them with software, manage a team, and fulfill your customers’ demands. All of that requires time and processes to get right.
And when 46% of small and medium-sized businesses don’t have an inventory tracking system, many companies don’t do it right.
Are you interested in reading a few inventory tracking tips that will help you manage your product stocks? Check out the guide below to learn how to optimize your inventory tracking system.
Define Priority Inventory
Knowing which inventory is most important is one of the most critical things to get right. The chances are good that most of your products aren’t great sellers. You’ll have a few winners and a lot more products that don’t sell as well.
This information is critical for keeping your inventory stocked. You’ll need to order your popular products more often, so it makes sense to put your focus on those items.
To do this, you’ll need to audit those products’ inventory counts regularly. Assign someone to watch your stock level constantly and put in a new order when you hit your reorder number. If you have inventory tracking software, you can also trigger an email alert to let you know your stock is low.
You may not need to be as prudent about items that don’t sell as much. But that doesn’t mean you should completely ignore them.
It may not be possible to check all your products during all your checks, so come up with a more extended timeframe for reviewing these items. You can still run out of less popular products if you aren’t careful.
Create Demand Forecast
In most situations, you’ll understand how much inventory you need to fulfill demand. But that doesn’t mean that demand will stay consistent at all times.
Most companies have busy seasons. If you have a product business, this time may be during the holidays. People will buy gifts for their loved ones and generate demand.
Other industries are more seasonal. Gardening, for instance, primarily trends during the summer. Most people won’t spend time outdoors during cold months and will ignore gardening products as a result.
You need to understand these trends to have good inventory counts. Determine when to expect spikes in demand during the year to ensure you order enough products.
Of course, there will also be times when you experience unexpected demand spikes that fall outside the norm. But there are signs you can look for that will tell you this will happen.
Make sure you consider those factors during your demand forecast to better understand when your business will experience unexpected growth.
Do Inventory Audits
If you’re doing your job as a warehouse manager, you’ll have an accurate count of all your inventory. Every new shipment gets put into the system, and items are removed when sold.
The problem is that things don’t constantly get updated. Software products can fail, people will enter bad information, and products can get damaged in the warehouse. The question is, when will you find out about these problems?
The last thing you want to happen is to learn about these issues when you need to make a shipment. You’ll end up with out-of-stock inventory and need to cancel customer orders. That’s not a great customer experience.
Auditing your stock will help you avoid these problems. Create a schedule to work through your warehouse and count your products. Do this even if you have a primarily automated stock tracking system.
Doing this will help you find mistakes and rectify them before they cause more significant problems. The small amount of time this takes can help you avoid much bigger problems in the future that cost your business money.
Using collateral management software in inventory audits improves accuracy and efficiency, ensuring a smoother process for tracking valuable assets.
Use Tracking Technology
One part of tracking inventory that sometimes gets overlooked is knowing where your products are in the warehouse. This is important because it’s hard to remember where everything is when you have a lot of products. That can lead to a lot of wasted time when tracking down products to ship.
One tool you can use to solve this problem is tracking technology. You can install monitoring chips or RFID tags in product locations in your warehouse. If you pull up the tracking tool on a computer or mobile tablet, you can see where everything is in the warehouse.
This means your warehouse workers won’t need to waste time in the warehouse going to the wrong place. They can go straight to a product’s location and quickly move it to a packing station.
You don’t want to ignore this big productivity increase for your operation. You can ship a lot more products every day when people aren’t wandering around trying to find products.
Invest in Inventory Software
Software is a must for an inventory tracking system. Yes, you can put things in a simple spreadsheet if you want to enter all your data manually. But that is far too time-consuming and can lead to errors because of data entry problems.
One of the best benefits you’ll see when using an inventory system like Quickbooks inventory is automation. You can automate data entry when you get new shipments. You can also connect your system to online stores and internal tools to update inventory when it sells.
That means you can save a lot of time and prevent many mistakes when you use inventory software. That’s time you can use to grow other parts of your business.
On top of that, many inventory systems connect to other software products. You can share data between these applications to make better use of data and create reports that help you make better business decisions.
Optimize Inventory Storage
One of the things you can’t overlook when tracking inventory is where you store it in a warehouse. This may not be an issue if you have a single product or don’t have much stock. But as your business and inventory count grows, how you store your inventory plays a more critical role.
Take a product that’s a best-seller, for instance. What happens if warehouse workers need to walk long distances constantly to get fast-selling products? People will spend much of their time on their feet instead of packing for customers.
To avoid this problem, optimize your warehouse layout to put fast-selling products in the front. Doing this will reduce transit time and improve the efficiency of your workers.
Yes, people will still have to walk far to get to less-popular products. But the time added for those products won’t be nearly as much as the time saved for your best sellers.
Watch Supplier Performance
Tracking your inventory doesn’t start and end in your warehouse. You need to watch your inventory once it heads to your customers and see what happens with your suppliers.
Unfortunately, there will be times when your suppliers don’t offer excellent service. They will ship late products, deliver damaged goods, and stop frequent communication. All of these are signs that you need to re-evaluate your supplier partnerships.
Monitor your suppliers’ performances to see if there are any issues. Reach out to them when this happens to see if there is anything to be done. If not, it may be wise to look for another partner.
Track Poor Performers
High-performing products aren’t the only products you should keep a close eye on. As time goes on, you’ll probably see some of your products don’t sell. You have to ask yourself how much money you’re tying up in inventory and how much space you’re wasting in your warehouse.
In cases like this, it may make sense to liquidate products that don’t sell. There’s no reason to keep products around that nobody wants to buy. You can use the money you recoup for product research and purchasing better-performing products.
Look at your low-performers every so often and prune everything that doesn’t make sense to keep around.
Keep Working to Improve Your Inventory Tracking Strategy
Inventory is one of the hardest things to get right in a growing business. You can have the best products in the world, but unless you get them to customers on time, you won’t get many repeat customers.
That’s why you need to do everything possible to optimize inventory tracking. If you don’t, you’ll lose track of your current stock and may be unable to fulfill customer demand.
Luckily, you can use many inventory management tactics to make things easier. Follow the inventory tracking tips above to optimize your inventory system. Head back to the blog if you want to read more business management tips that will help businesses of all sizes grow.
Kenneth is a proud native of sydney, born and raised there. However, he pursued his education abroad and studied in Australia. Kenneth has worked as a journalist for almost a decade, making valuable contributions to prominent publications such as Yahoo News and The Verge. Currently, he serves as a journalist for The Hear Up, where he focuses on covering climate and science news. You can reach Kenneth at [email protected].
