A robust inventory structure is essential for smooth operation of your business. An effective inventory management system ensures healthy distribution and supply chain cycle. But what makes the inventory management system well-aligned?
Maintaining a well-functioning inventory system will be convenient if you learn the art of balancing goods in your stock. In simple words, well-aligned inventory process has an effective flow of goods coming in and going out. For this reason, Inventory control is one of the core aspects of a good inventory management system.
Why?
Because effective inventory management is not possible if inventory cost controlling is not exercised. Are you wondering what steps you can incorporate to control your inventory costs to ensure a robust inventory management system? Don’t think much. We have assembled some of the most useful tips below:
- Allocate Responsibility
A good inventory system starts with the allocation of responsibilities to the right person. By assigning roles within the inventory management system, you can track down the actual point where fraud, mistake or error occurs.
Apart from defining responsibilities, you must also have at least one the person who has an overview of all the other tasks along with stock operations. This setup will allow you to get quick responses about inventory and create an efficient observation system for workers performing various inventory tasks.
- Inventory Management Software
If you want to bring order into your daily inventory operations, you must consider implementing good inventory management software. It not only simplifies the work but also helps you keep an up-to-date inventory data. When you are choosing the right inventory management software, make sure you list down all your requirements and select the software that suits the needs of your business.
- Make Your Orders Efficient
As a successful business, you must refrain from investing too much or blocking your resources in inventory. Immobilising your resources in inventory erodes your profit. Inventory depreciates like other assets. And proper storage efforts add to the overall cost. You must focus on finding a suitable re-order point that allows your business to operate smoothly without blocking resources in your store.
An inventory and supply chain consultant can help find an efficient reordering point through calculation of economic order quantity. By analyzing your business needs, an inventory consultant can assist you in deciding whether it is cheaper to get small supplies faster or large supplies at low cost.
Implementing the right system for inventory management is important especially if you deal in perishable goods. A consultant can help you in establishing a right inventory system.
- Physical Verification of Inventory
Robust inventory management is possible through impeccable inventory control. And physical verification is one of the best methods to ensure better inventory control. Physical verification of inventory at regular interval is necessary to sophisticate the store. Although physical verification of inventory twice a year is considered ideal for most businesses, the actual number depends on the size of your inventory and speed requirements.
If you are thinking to skip the physical verification process because you have an inventory management software, think again. Physical verification of stock at least once a year is crucial even if you might have an inventory management system that updates the stock information. Physical verification ensures that your inventory in system matches the physical stock in your warehouse. Thus, the accuracy of inventory is assured.
- Optimise Your Stock
You must determine the minimum level of stock you want to maintain in your stock. Stock optimisation is possible only through the efficient ordering of inventory. You must also avoid reordering only one type of product repeatedly. It is better to make a priority list and then design the reordering system to avoid getting more unnecessary items. Another important method of stock optimisation is keeping a track of stock item coming in and selling out. This record will help you analyse the overall requirements of stock.
Physical verification and inventory control are important elements of the inventory management system. Inventory and supply chain consultant can help you optimise your inventory system to control your cost and efficient management of your operating capital.
If you want to create a robust inventory structure in your business, connect with VGNC today!
