If you’re in retail, production or food of any type, there’s a side of your business that could be going horribly wrong without you knowing it. Poor inventory management creeps up at first, invisible and seemingly harmless. For a lot of people, when they realize they have a problem is when it’s too late to do anything about it. Your productivity, your cash and the survival of your business rely on better inventory management. Here’s how you go about it.
Pay extra attention to your suppliers
The supply line is vital to the health of the business. So, make sure you’re not only focusing too hard on your end. Make sure that any suppliers you rely on have been well vetted before you continue entrusting them. In particular, look out for scammers or suppliers who clearly aren’t equipped to do what they say they will. They’ll let you down in the end.
Know your demand
Similar to how you shouldn’t trust suppliers who promise you the world, you shouldn’t get too ambitious yourself. Overspending on your inventory can be dangerous. Particularly in industries where goods are perishable. You could be sitting on wares that are going nowhere and degrading fast. Make sure you know the demand for products by tracking their lifecycle and how successful they are. Factor in the cost of goods sold as well so you’re making more informed financial choices on how much you buy.
Automate your goods
The process of how you deal with goods needs to be faster and more efficient. The more time you spend on processing or manufacturing, the less revenue you gain for each product made. For one, eliminate any obsolete space between processes. Then look at how you automate the tech you’re using to keep your supply chain going. For example, using things like a tube conveyor instead of moving things manually.
Don’t waste space on inventory
Having some space for inventory is essential, of course. But sitting on inventory that isn’t going anywhere can be fatally costly for your business. That’s just one of the risks of getting your demand wrong. It also costs to keep and supply the facilities you’re using to store that inventory. How you get your goods out of your control is as important as how you get goods in.
To bulk or not to bulk
We’re going to address a tip that we think is given too freely and too recklessly. Everyone will tell you to bulk buy because it works out cheaper for you. There’s no doubt about that. However, bulk buying also brings in those risks of overspending and taking up precious inventory space, as well. When someone offers to sell you more than you need at a bulk price, it’s better to turn it down than see it as an opportunity. Otherwise, bulk buying can be very useful for the goods that you’re able to shift a lot quicker.
Using the data at your disposal and helpful tech, it’s not too difficult to stay in supply without going overboard. The more efficient you get your system, the better it is for your business. So, start implementing the tips above as soon as you can.