Inventory Management Strategies: Best Practices
Inventory Management Strategies: Best Practices
Inventory Management Strategies: Best Practices
strategies
Inventory management is a crucial part of running a profitable business. Establishing an effective
inventory management process can help you:
Inventory management practices can help you plan, control, and organize the goods and
materials required for your business. They will enable you to order the right type and amount of
inventory to meet your customers' needs and keep your goods moving off the shelves. If
inventory control is managed properly, it can help your business reduce its costs, achieve
economies of scale and prepare your business for uncertainties.
Best practices
Keep accurate inventory records: consider using inventory control software to track and
analyze your sales and inventory levels.
Put just-in-time inventory management into practice: find suppliers that can meet your
needs as you fill orders.
Pay attention to consumer and industry trends: find out what hot new items are coming to
the market so you are not left with obsolete inventory.
If you are having trouble selling items in your inventory, consider offering discounts or
donating them to charity.
Plan for the unexpected: make sure you have a good relationship with back-up suppliers
to ensure that goods will be delivered if your main supplier cannot supply your products.
Measure performance on a regular basis so you can adjust the targets or your process to meet
your goals. Talking to your customers about their expectations can help you set suitable service
level targets, so don't be shy — keep the lines of communication open.
Predict sales
Sales forecasting can be a challenging process, but developing an accurate sales forecast will
help you estimate how much inventory you will need to have on hand. If you are starting a new
business, you will need to make sales assumptions based on market research. Your local chamber
of commerce may be able to help you get started, and there are online tools that can help you
benchmark your company against other firms in your industry. If you have been in business for a
while, adjusting your past sales figures can help you paint an accurate picture of upcoming sales.
The BDC's inventory turnover calculator measures your business' inventory turnover ratio. The
result can help you analyze your inventory quality, make purchasing decisions, and set
benchmarks.