If you’re starting or considering a new business in retail, supply, or manufacturing, inventory management is essential to efficient operations and cost control. Delays, outdated product, and poor ordering practices can impact customer satisfaction. Below, you’ll find a brief guide to managing your inventory profitably.
Organize for Efficiency
Remember that every wasted step is costing you in terms of productivity. Look for ways to reduce the number of “touches”, or physical activities needed to receive, store, and issue product. Try to organize your inventory so that items are close to where they’re needed, such as raw materials adjacent to production and packing boxes near order fulfillment. Frequently used goods should be grouped together and closest to their point of use to save time in staging them.
Have a System
For maximum efficiency, you should work up and constantly improve on your own management system. Have SKUs or part numbers for everything that goes through your warehouse. Whether you buy inventory software or rely on spreadsheets, be certain that every product that comes in or goes out is recorded in terms of quantity, purchase order number, ordered and received dates, vendor, and storage location Your system should allow you to do quick searches and run reports you can use to verify availability, track suppliers, and predict ordering trends on a range of materials.
It’s important to achieving and maintaining effective control that employees are familiar with your policies and protocols. Every warehouse employee should understand your storage and inventory management systems, as well as conducting periodic inventory checks. They should also be trained in properly handling equipment and product to minimize financial loss and comply with safety regulations.
Maximize Storage Space
Warehouse space can be a major expense, so it’s critical to make the most of what you have available. Focus on using vertical space with taller racks or overhead compartments. These can be used effectively provided that you invest in forklifts or similar equipment. Don’t forget about using stackable plastic storage containers to manage items that can’t be safely stacked. You can purchase customized storage containers to suit your unique product and storage environment.
Once you’re on the way to getting these fundamentals worked out, you can start improving on your processes. Track every aspect of your logistics. Then you can focus on sustaining the right stock levels to ensure your team has the materials and information they need to get orders out the door quickly and accurately.