Good inventory management is a key factor in the success of any product-based business. Not only is it critical to have accurate info about what you have in stock, but inventory organization (or the lack of) affects customer service, as well. A cluttered inventory can make it difficult to fulfill orders in a timely manner.
Fortunately, any company can develop a good inventory system with a little thought and planning and plenty of elbow grease. Here are a few effective tips:
Logical Storage System
Store similar items close to each other. This way, you’ll have a better chance finding what you need just by walking into a certain section. You can also do this with associated items, such as parts and accessories.
Clearly Marked Signs
Divide your warehouse into clearly labeled sections and sub-sections. Don’t just label a room “Storage”. Be thorough and label each desk, drawer, closet, and shelf in a logical manner. This way, people will be able to tell others how to find something, even over the phone or email.
It would also help to include some sort of description for each storage location, just so people won’t have to open up boxes to figure out what a shelf contains. This is going to be a particularly big help if your products are sealed when in storage.
Set a Restocking Threshold
You don’t want to receive an order, only to find out the item’s been out of stock for months. Set a minimum inventory level of certain items so that you always have something on hand. But don’t set the same restock threshold for everything. Consider the item: if it’s popular and a best seller, set a high threshold. If the item is slow-moving, then set a low threshold. You may even want to set really unpopular items as an “order only” item, with no stocks at all. This will help you save on space.
Tracking Software
Although paper is still a viable and time-tested method of tracking inventory, a computer software-based system is leaps and bounds ahead. It is easier to manage and update, and will save you much more time and money in the long run.
One specific way that software can help is that it will be able to give you an easier look into your inventory’s age. Products that have been on the shelf a long time end up costing you more money via declining value and condition, and by taking up space. Thus notified, you can make a sales or marketing push to try and get those items out the door.
Strict Adherence to Procedures
The best inventory system in the world will be useless if nobody follows it. Set strict policies on following the inventory system. This includes entering data into the software. Most such programs are very literal. If one person enters item number TX-573 and another enters TX573, the software will most likely count them as two separate item classes. Establish firm procedures for entering product codes and conduct regular maintenance on these software databases to clean up your records.
