Inventory Management begins with a definite procedure, but inventory management software tools can help us well. Here is the guide that will help you enhance your inventory management.
Inventory management is an essential piece of a business’s profitability, but a lot of small businesses do not practice adequate management when it comes to the items they sell. Where some businesses have too little inventory, so they can’t meet customers’ expectations by supplying enough available products. This is the reason that often drives customers away, sometimes for good and sometimes to another business.
On the other hand, many businesses go a different way, such as overstocking the items “just in case they require extra stock.” Although you will always have items your customers are looking for, the only risk involved with strategy is bleeding money from your business’s pocket. When you have excess inventory, it only ties up valuable cash flow, but it also costs more to track and store.
When inventory management is right and effective, it lies somewhere between these two extremes. Also, it requires more work and planning to accomplish an efficient management procedure. And ultimately, your surpluses will reflect your efforts.
Here are three vital key points about inventory that you might want to know:
- Inventory Management includes stocking, ordering, and using a business’s materials and products.
- There are multiple types of inventory such as raw materials, cycle inventory, and MRO goods.
- When you prioritize your inventory, it helps you understand what you need to order or manufacture more frequently. This way you can continuously satisfy your customers’ needs.
Lets us take you to the step where you will understand the types of inventories.
Types of Inventory
Before you start how to handle inventory management effectively, first you will need to understand exactly what inventory comprises. Here are some of the different types of inventory that are as follows:
- Raw Materials: We can also say materials that you use to manufacture your products.
- Unfinished Products: It is like works in progress that are not ready to be sold.
- Finished Products: These are typically stored in a warehouse until shipped or sold.
- In Transit Goods: These are the products which no longer present in the warehouse and are being transported to their specific destination.
- Cycle Inventory: Products or inventory that are shipped to a business from a supplier or manufacturer, after that, immediately sold to customers.
- MRO Goods: MRO stands for maintenance, repair, and operating supplies. It supports the production process.
- Anticipation Inventory: These are the excessive products in anticipation of a surge in sales.
- Buffer Inventory: It is a safety stock that serves as a cushion in case of some unexpected issue occurs or needs more inventory.
- Decoupling Inventory: These are parts, supplies, and products that are set aside in anticipation when the production slowdowns or goes to a halt.
These kinds will help you streamline your inventory, so you know which items fall in which category. And you can manage accordingly. For instance, you will tackle your raw materials differently from your finished products.
What is the Best Program for Inventory Management System?
There are numerous inventory management software programs that are available for small, medium, and large businesses. The best inventory management system for your business depends on various factors. For example, you will want to check on your budget, what will be your business type, and what other features you are looking for such as cloud backup or mobile applications.
The Zap Inventory is the software that comes to the rescue to manage all business inventory in one go.
Zap Inventory is a fully integrated inventory management software with productive stock control and order fulfillment. You can conveniently handle your business and expand your income with Zap Inventory features.
Zap Inventory Management Software allows you to handle various features without any hassle and chaos.
Pro Tip: You can use their services for free too! Try Zap Inventory services free for 14 days and make the best out of it. Connect with them now and make a great way ahead and boost your business.
Zap Inventory paid package list:
Starting from $ 25 per month (for Lite subscription, up to 1 user)
Starting from $ 67 per month (for Accelerator subscription, up to 3 users)
Starting from $ 125 per month (for High Growth subscription, up to 8 users)
Merits of the Zap Inventory Software
- Dear Inventory offers a free trial availability
- It has a credit cardless trial
- You can get the subscription based support
- It gives you access to create a free account
Top Notch Points for Managing your Inventory
Under you will find the ten prominent tips to manage your inventory effectively to accelerate the profits and cash flow management. So, without any ado, let us jump to the points quickly.
- Track all product information
You have to make sure that you keep records of the product information and details for the items in your inventory. The information list should include barcode data, SKUs, suppliers, countries with their origin, and numbers lot. You might also wanna consider tracking the cost of each and every item over a period of time. Factors like scarcity and seasonality may change the cost so you will be aware when the cost has been changed.
- Make your inventory a priority
You can categorize your inventory into priority groups that will help you comprehend which items you need to order more and more frequently. And which items are important for your business but may cost more and needs to be moved more slowly.
Most experts suggest segregating your inventory into groups A, groups B, and groups C. Items that fall under the group A category are higher ticket items that you require fewer in your stock. Items that fall under the group C category are lower cost items that turn over quickly. Group B is in the between, the items that are a part of the group B category are moderately priced and move out the door more steadily than group C items but more quickly than group A items.
- Analyze supplier performance
An uncertain supplier can cause complications for your inventory. If you have a supplier who has a habit of delivering orders late or frequently shorts an order, it is time to take some serious action. Go and discuss the problems with your supplier in case he has some issues and find out what the problem is. Be ready to switch partners or deal with vague stock levels and the possibility of running out of inventory as a result.
- Audit your inventory
Some businesses do a meticulous count once a year. On the other hand, some businesses do weekly, monthly, or even daily spot checks of their hottest items. Many businesses follow daily, weekly, monthly, and yearly counts. Regardless of what you do and how often you do it, make it a point to physically count your inventory routinely to make sure it matches up with what you think you actually have.
- Be persistent in how you receive stock
You might think that it is common to make sure incoming inventory is processed, but do you have a definitive procedure that everyone follows, or does each employee work differently while receiving and processing incoming stock?
Small inconsistencies in how new stock you want to take in could leave you wondering and in a dilemma at the end of the month or year, about why your numbers are not aligning with your purchase orders. You have to make sure that all of your staff that receives stock follows a similar procedure and that all boxes are verified, received, and unpacked together, counted precisely, and checked for accuracy.
- Keep following the 80 by 20 inventory rule
It is a general rule of inventory management that 80% of your surpluses come from 20% of your stock. You have to make a priority of that 20% of the items. You must comprehend the thorough sales lifecycle of these items which includes how many you sell in a week or a month and monitor them closely. These are items that will make you the most of the money, do not fall short in managing them.
- Restock the order by yourself
Some of the vendors offer to do inventory reorders for you. On the contrary, this is a good approach; you can save on staff and time by letting someone else handle the procedure for at least a few of your products. But be very aware that your vendors do not have the same priorities as you do. They will look out to move their items while you are looking to stock the items that are most lucrative for your business. Spare some time to check inventory and restock the order of all your products by yourself.
- Invest in inventory management technology
Managing the first eight things on the list manually with spreadsheets and notebooks is easy when you are a small size business. But as your business grows, and eventually it will, you will spend more time on inventory than you do on your business, or risk your stock getting out of control.
Inventory Management Software which offers by Zap Inventory will make all these tasks easier. First, make sure that you understand what you need before choosing a software solution and that it will provide crucial analytics for your business and it is effortless to use.
- Use technology that integrates easily
Inventory management software is not the only technology that will help you in managing the stock. Systems such as POS systems and mobile scanners can help you stay on track. When you invest in technology make sure that you choose systems that work together. If you have a POS system that cannot communicate with your inventory management software is not a big deal but it will cost you some additional time to transfer the data from one system to another. And you might make a mistake and end up with imprecise inventory counts.
10. Track the sales
This is not an easy task to count the sales, it can go beyond simply adding up sales at the end of the day. You must know on a daily basis about what items you sold and how many items were there and then update your inventory totals. Not only you need to add the sales but also you will have to analyze the whole data. Here, you have to see and analyze the broader picture such as:
- Do you know when specific products sell faster or drop off?
- Is it seasonal?
- Is there a particular day of the week when you make a sale of certain items?
- Do some products sell by themselves most of the time?
Understanding not just your sales totals but the bigger scenario of how products sell is essential to keep your inventory under control.
When you follow the process you can run the inventory management effectively and efficiently. With the proper procedure and using inventory management software, you can streamline your inventory to a great extent.
We hope that the points mentioned above will help you find the correct inventory management software for your business. And also, with the help of these points, you can segregate the inventory using the inventory management software smoothly and correctly.
You can try Zap Inventory product for managing inventory software to streamline your inventories in the warehouse. The Zap Inventory offers lucrative measures with its products. It is an outstanding and top quality Inventory Management Software that helps you manage your business effectively.
Also, you can try their services for free too! Try Zap Inventory services free for 14 days and make the best out of it. Connect with them now and make a great way ahead and boost your business.
Thank you for reading out this blog, get in touch with us and we will offer you the best inventory management solutions to expand your ecommerce business in an online market. You can also take the leverage of the software for free for 14 days trial! Get in touch with us now to leverage the maximum benefits and profits!