As a small business owner, proper inventory management may seem straightforward in the beginning. However, it becomes more complex as your business grows. There’s no need to let this thought overwhelm you, though. Learning about these inventory control best practices will help you keep steady control.
7 Inventory Management Best Practices
Inventory management goes further than tracking and stocking products. While these factors are undoubtedly crucial, their impact resonates throughout your entire business. Effective inventory management directly impacts customer satisfaction and retention, financial health, cash flow, and overall efficiency.
Whether you’ve been a business owner for years or are just starting out, mastering these seven inventory management best practices will help you maintain strong inventory control.
1. Categorize
Categorizing your inventory helps ensure organization and productivity by helping you prioritize different products and resources. Inventory can be classified in various ways, such as by location, item type, or date of order. One common approach is ABC analysis, which involves placing fast-moving items closer to the shipping area and slow-moving items farther away.
2. Track All Product Info
Keeping accurate records of product information helps ensure efficient management and effective communication with suppliers, customers, and your staff. Barcoding and scanning, RFID tagging, and using QR codes are common inventory tracking methods, but there are many alternatives out there. Some of the information you’ll want to track includes:
- SKUs
- Lot numbers
- Supplier details
- Pricing information
- Expiration dates
- Product descriptions
3. Set Par Levels
Par levels are the minimum inventory levels you should maintain for specific items. They act as safeguards against stockouts and help ensure that safety stock is available to cover unexpected demand increases or supply chain disruptions.
4. Demand Forecasting
By analyzing historical data, market trends, and customer behaviors, demand forecasting allows you to predict future product demand and maintain optimal stock levels. This proactive approach not only helps prevent disruptive stockouts but also contributes to the reduction of storage costs.
5. Continuous Monitoring
Continuous inventory management helps you keep a watchful eye on inventory. Through methods like cycle counts, you can maintain real-time visibility into inventory levels and promptly identify discrepancies. This ongoing scrutiny allows for proactive quality control, minimizing the risk of overstock, human error, and other common problems.
6. Leverage Technology
It’s great to do things manually, but sometimes, it’s more efficient to harness the power of technology. An inventory management system can help you efficiently track and control your stock by providing real-time updates, reducing errors, and streamlining your operations. Cloud-based software has become especially popular as it allows you to easily access data regardless of location.
7. Work With a 3PL
Proper inventory management is a difficult task, often extending beyond what you can achieve on your own. That’s why partnering with a 3PL is key. A 3PL can help take the load off your shoulders by providing you with valuable expertise, technology, and other resources you may not typically have access to.
Want help from the experts? Conveniently located in the Midwest, Sherpack has an experienced fulfillment team ready to serve your business. From managing your inventory to kitting, shipping, and more, we’re here to find a solution that fits your unique needs. Contact us today!
