The systematic approach to sourcing, storing, and selling inventory- both raw materials and products are termed as Inventory Management. In the terms of business, it refers to the right stock, at the right levels, in the right place, at the right time at the right cost as well as price. Entrepreneurs, founders, and independent brands now work for e-Commerce stores all over the globe.
The Definition of Inventory Management:
It is a part of the supply chain and includes aspects such as controlling and monitoring the purchases from suppliers as well as customers. It helps in maintaining the storage of stock, monitoring the amount of product for sale as well as order fulfillment.
For a growing business, you must know when to order, how much to order and where to add the stock and also keeping this all a simplified process. To deal with the complicated process of inventory you must ensure the utilization of good cloud-based software to make your inventory system easy and simple. The world is digitized and relying more frequently on the software industry especially for handling the daily operational tasks of inventory.
The Significance of Inventory Management:
For any business that is products-based the value of inventory cannot be ignored which is the reason why your Inventory Management allows the best possible efficiency and longevity of your business. From the perspective of a product, the significance of the management of inventory lies in monitoring the stock you have on hand, and the stock present in your warehouse. You must also monitor how and when stock is going in and out of the inventory stock. The clarity of the inventory system guides you to:
- Reduce costs
- Optimize fulfillment
- Provide the best customer service
- Prevent theft
- Prevent misplacement
- Prevent returns of products
The Importance of Inventory Management:
It is extremely important to small businesses because it helps them prevent stock-outs, manage multiple locations of business, and allows accuracy in record keeping. If you try to handle it all manually it would be extremely difficult for you but automated software will help you ease your daily inventory processes and tasks.
It saves you money and allows you to fulfill all the customers’ requirements. The cost control of operations is also enabled successfully. The backbone of your business relies on stock management and what you hold in your stock at a given time.
The Tips for Managing your Inventory:
- Prioritize your inventory
- Track all product information
- Audit your inventory
- Analyze supplier performance
- Practice the 80/20 inventory rule
- Be consistent in how you receive stock daily
- Track sales
- Order restocks yourself within the time duration
Note: The 80/20 inventory rules imply that 80% of your output comes from the 20% efforts you make in your business while managing the inventory.
Why do you need the Safety Stock?
The main purpose of safety stock is to ensure the availability of stock at all times so that you never run out of stock. Due to the uncertainty level, having an amount of inventory in reserve can allow a business to bear any difficulties with demand or supply, and keep the customer happy and blissful.
What are the Functions of Inventory?
The functions of inventory are to segregate the various parts of the production process, protect against stock-outs, and benefit from quantity discounts, against inflation. These functions are all important, you cannot deny the importance of them all. Each function is fully responsible for the revenue.
What are the Three Types of Inventory?
It depends on the types of goods and what kind of inventory you possess. The goods can be raw to finished products ready for shipping. Work-in-progress are those goods that are semi-made. Hence, you can decide your type of inventory easily.
What are the steps to solve your Inventory Problems?
There are the following steps you require to solve your inventory problems:
- Define the actual problem
- Determine the value for each category of products’ stock
- Develop analytical reporting procedures to track the actual problem
- Figure out inventory problem levels
- Create a short-term solution
- Plan and schedule the disposal of problem/expiry stock
- Determine the causes of the inventory problems
Hence, to avail of the best possible software for Inventory Management, you must opt for SMACC which is a cloud based ERP system. This software offers the features of global accessibility and data encryption so that your data remains secure and you can access it from any location around the globe. Moreover, you cannot deny the importance and significance of SMACC in the field of dealing with the inventory system. You can step ahead of your business competitors with much lead and progress just with the help of SMACC efficiently.