The importance of knowing your inventory
We all know that cash tied up in inventory simply reduces opportunities to expand sales and grow your business. Careful inventory management provides businesses with a financial boost, as well as enabling others in your organisation to provide the ultimate customer experience through providing what a customer or market requires, whenever they need it.
Here are a few tips to help you on your way:
1. Know your inventory and prioritise
Always track what is in stock, what it is worth and the trends of movement in stock value. An enterprise resource planning software system such as MomentumPro will help you to prioritise the fastest and slowest moving items, and point out the value locked away in inventory.
2. Reduce supplier lead time
Identify suppliers that can assist your business with the fastest turnaround or provide consignment stock. Understanding when items are needed and the usage history should form part of your projected demand figures.
3. Project inventory demand
MomentumPro allows managers to predict what will happen in the subsequent 3 – 6 months which can assist with the reduction of lead times but also allow for cash flow planning.
4. Eliminate out of stock items
Lost sales are the inevitable consequence of out of stock products. If a business is unable to provide what the customer wants when they want it, then costs increase, supply agreements fail and a business can grind to a halt.
5. Systemise information control
Create policies and procedures around inventory, record and track usage, review stock levels, trends and turnover and deliver action plans to address any arising issues.