The Basics Of Inventory Management

The Basics Of Inventory Management

Proper management of your inventory is crucial for a healthy profit margin and cost controls for your business. Making sure you have accurate numbers across the boards is a very efficient way to maximize your business’ profits. If you don’t have a good handle on your inventory levels, it can make ordering a nightmare and employee theft can get way out of control. Fortunately, there are some great tips that will help you with the basics of inventory management that I’ve outlined below. Using these tips, you should be able to take a few strides forward in controlling your inventory counts.

Reliable Inventory Software

The most important part of planning a strategy to keep accurate inventory records is to have a system in place that you can count on. In this era, the only practical solution is to buy inventory software that will help you keep track of items as they exit your inventory via retail sales. This form of inventory management is by far the most common, and as long as your cashiers are accurate you should have a number that are almost dead on with your actual stock levels.

Location Names and Labeling

Keeping your items in the right location is very important to being able to count them accurately. If you have items that are placed on shelves all over the place, it can make it very difficult to get an accurate idea of your inventory levels. Having simple to read and understand location names and labeling will help you keep items stocked together to avoid any confusion when doing your physical counts.

Item Numbers and Descriptions

Assuming you are using inventory software to keep track of your stockroom, you need to put simple and effective item names, numbers, and descriptions in place so everything is easy to identify. Sometime the actual product name is too long to make for an effective labeling name, so try to use common sense when entering information for new items into the computer. If you make it too difficult to locate certain items, your employees may get lazy and just stick them anywhere they like.

Accurate Starting Counts

Before you implement any inventory management solution, you need to have very accurate starting counts for every item in your stockroom. It is almost impossible to keep accurate counts if the initial count is off, so take your time and make sure you get everything right. The best way to do this is to team your employees up as pairs and have them both count the same items one another. After they get through all of their assigned items, they can compare their counts and locate discrepancies. If anything is off, they can go back and recount those items. If everything matches, the chances are pretty high that the counts are 100% correct since 2 different people counted them and got the same numbers.

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