4 Tips for Effective Inventory Management
Managing inventory is an essential part of running a business. Doing a poor job or having inefficient protocols can lead to mistakes like missing orders, late orders, or sometimes even losing a customer.
A good system for inventory management is key for keeping a business running smoothly. You have to be aware of what products you have, which ones are in stock, and to be able to locate them quickly. With that in mind, here are four tips for effective inventory management.
1. Always use SKU numbers and UPC barcodes
An SKU (Stock Keeping Unit) is a unique number assigned to every product. Not only do these numbers make products quickly locatable, but they also make it easy to differentiate between two products from different companies that are both named “Blue Shirts,” for example.
Similarly, a UPC (Universal Product Code) is also expected, especially when you’re working with resellers. It’s the same idea as an SKU, but it’s in the form of a scannable barcode which is identified and stored in a database. A note: be sure to purchase UPCs from GS1, which is the globally recognized organization that develops worldwide standards for supply chains. The whole point of a UPC is to be scanned and located in a database, so you want your barcodes in the database that everyone uses to avoid confusion and frustrated customers.
2. Develop a good system for processing and fulfilling orders
Many businesses don’t have effective systems for processing and fulfilling their orders. Combat this before it becomes a problem by coming up with a checklist of tasks that must be done before an order can be marked as fully processed and fulfilled. Make sure that if you have other spaces where you manage inventory, or if you have a spreadsheet for inventory, adjust the values accordingly across the system.
3. Do monthly audits
Technology is a wonderful tool and makes so many once-tedious projects as easy as the tap of a button. Even so, inventory can get lost, damaged, thrown away, or stolen, so regular audits of your inventory is a good habit to get into to prevent major issues down the road.
A simple way to get this done is old-school: create a printout with the product names, SKU numbers, and the inventory numbers you have in your records, and write in your physically counted inventory numbers in the spaces beside them to see if they match.
4. Keep accurate records
You always want to be aware of which products are your biggest sellers, what customers spend the most money, which customers keep coming back, and what times of year are slow for business. Not keeping track of this information is basically driving with your eyes closed. Using your gut to make important business decisions can be disastrous, especially when it comes to measurable quantities like inventory and orders.
If you’re on the hunt for a business to take care of your inventory needs, Elite Ops is a Utah-based distribution company that has provided quality inventory management solutions for over 20 years. Give us a call to see how we can help: 855-553-5490.