Improving inventory accuracy will reduce operating costs and increase the company’s profit line. Accurate inventory management is very important from several aspects, all of which have a big impact on the profit line. From such management, very great benefits can be derived, which we shall look at later. Nevertheless, in many companies inventory management does not receive the appropriate reference. In fact, many of them do not manage inventory at all.
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Managing your stock well comes from the storage facilities used. You should opt for storage spaces that are safe and secure and therefore you will be able to ensure that you are actually getting the most out of your money. You must also set up the right systems to track your inventory once they are in storage. There is usually a system for managing inventory on a computer, but it does not really reflect what exists in the field. Moreover, there are still companies whose inventory is not registered in the information system at all, but they are in the minority. You will immediately have the opportunity to examine yourself. But let’s start by examining the various aspects of inaccurate inventory management.
Regarding finance, you must be sure to look at ways to keep costs down or at least store your inventory with reasonable pricing. Therefore first you should get a quick storage quote to see if you are able to get a price that works for you and aligns with your budget. After all, the places that you sink your finances into other areas such as marketing, communications, computers, and technology. But inventory management is also an area to invest in too. Not only does it affect your business’ logistics and its running, but it can also have an impact on your staff.
How does inventory management affect employee behavior?
Once employees recognize that management does not really care about the precise management of the movement of materials, of which a very important part is the management of inventory, they understand two important messages:
- “Inventory is not really important to management.”
- It is possible not to be careful about recording the income and expenditure of materials to and from inventory.
The result will be:
- There will be no orderly registration of warehouse entrances.
- There will be no care to put everything back in its place neat, clean and ready for reuse.
- The integrity of parts or materials returning from the production, or from customers, will not be checked, and in many cases they will not be reusable.
- Production workers will receive materials in place of those disqualified without follow-up and without surgery for the reasons for disqualification and without further learning.
- Materials that have reached the expiration date will be transferred for destruction without control and improvement.
The logistical aspect: ensuring timely delivery and preventing inventory surpluses
If the inventory listed in the computer system is inaccurate, you may not order missing goods that are listed as existing, or order excess goods that are existing and listed as missing. Both situations are very expensive. When you enter the order of orders and only then discover that essential components are missing, you will start running orders and urgent deliveries and for everything you will pay a more expensive price. On the other hand, if you order components that are not needed, they may become dead stock, or stock that will lie in the warehouse, cost money and take up space.
This is why market research is key, because it allows you to know exactly what your customers want and when. You can find out what products are doing better than others and what your popular products are. This way, you can become better aware and train your staff to prioritise.
What types of inventory are there?
- Raw material inventory – Materials intended for the production line, reliable and quality inventory management from receipt of the inventory until it is transferred to production, will ensure that there will be no delays in production plans due to shortage of raw materials.
- Inventory in the process – Inventory of materials that are in the production line and waiting to be used in the various workstations. (Note – Raw material inventory and in-process inventory are usually only found in manufacturing plants)
- Finished stock – Ready to sell stock.
- Auxiliary inventory – Inventory that does not participate in production directly, but without which production cannot be completed, for example, packaging materials and office needs.
- Returned inventory – Inventory returned from the customer for replacement and / o repair.
Once you are aware of this type of inventory, you can implement the necessary software designed to deal with each one.
Market Research Affects Your Inventory?
Market research is part of a survey system that also includes evaluation research or various social studies. Market survey is divided into 2 main types: market survey for a new product and market survey for an existing product. In fact, market research is any research that examines the production and marketing of any product, new product or existing product.
A market survey is also done for the purpose of comparing prices and is therefore considered an appraisal study for all intents and purposes. Today market research is a necessity for three reasons: it enables production according to demand (e.g. in a new product), it enables improvement of existing products, and adaptation of the marketing campaign to new or existing products.
As in other social studies, market research is done with precise segmentation of the business or product. As in other social studies, here you need to know how to ask the right questions and not just mark a goal. In fact, every market survey is based on 3 identical steps:
- Research Methods – Market research must be based on modern and up-to-date evaluation research for one reason: Today marketing techniques use internet tools and this should be adapted in terms of research methods as well.
- Conducting the survey – Conducting the survey must conform to the client’s requirements while maintaining professional confidentiality. This way you can be sure that organizational secrets (for example regarding new products or improving existing products) will not reach your competitors.
- Survey results – The results of the market survey should reach the relevant organizational factors in a clear, eloquent and clear manner. The reason for this is simple: these results are the basis for various marketing actions of new products and of existing products.
Managing warehouse inventory is a complicated and complex task
Managing the warehouse inventory that is owned by your company or business is not a simple task at all, and some would say that it is a particularly complicated and complex task. The person in charge of inventory management should know at any given moment what the inventory picture of the stored products is, in order to try and minimize as much as possible situations of shortage or surplus in any product. To know when the need arises to place an order to replenish a particular product, the same person in charge needs to know in advance that any product is about to run out. To streamline the inventory management work in a warehouse under your responsibility, you can use warehouse inventory management software. This is computer software, efficient and simple to operate, which will make the whole process much easier and friendlier.
How can warehouse inventory management software help you?
The use of warehouse inventory management software facilitates the work of the warehouse manager, and at the same time, saves the business owner time, money, and human errors that may be caused as a result of routine work. A warehouse inventory management system can make an order for you in all the multiplicity of details and products while calculating the quantities available in stock at any given moment. In addition, inventory management software makes it possible to track orders from suppliers, thus managing the company’s purchasing process in an orderly and transparent manner. Of course, the software can be tailored to any specific need that characterizes the business.
Purchase warehouse inventory management software from an expert manufacturer in the field.
There is a wide range of inventory and warehouse management software on the market, so it is advisable to conduct a brief market survey before choosing which software you prefer to purchase. This is a considerable financial expense, so it is best to make sure that the purchase is made from an experienced and qualified source. The more you share your business needs with the manufacturer or marketer, the simpler and more agile the software matching process will become. It is important that you define your main professional goals, in order to coordinate expectations even before purchasing the software (is it able to help you meet these goals?
Adequate inventory management is important as is the storage facilities used and software to help you keep on top of things. Therefore, be sure to do your research, inform your staff and keep them on top of changes. If your staff doesn’t know what they are doing, then this leaves room for human error. Therefore, be wise, invest well and use the best staff you can find.