Managing Inventory is important, here are the best practices!
We know how difficult it can be to manage inventory efficiently. Even the best of businesses can struggle! For small businesses or those just starting out, we’ve compiled a few of the best practices to properly manage inventory!
1. The ABC Analysis
The ABC Analysis is a technique for arranging inventory into a hierarchy. A items are best selling and highest priority. B items are valuable or medium priority stock items. And C items are low priority items. This method helps to optimize storage space and requires minimal reordering!
2. Use a Reorder Point Formula that’s Accurate
A reorder point formula tells you approximately when more stock needs to be ordered, or when you’ve reached the lowest amount of inventory able to be sustained. This allows you to no longer become a market spike victim and helps retain consistency.
The formula is (Average Daily Unit Sales x Average Lead Time in Days) + Safety Stock = Reorder Point.
3. Carry Safety Stock Inventory
Safety Stock Inventory is a small surplus amount of inventory you keep in hand in case of market demand variability. It’s critical to avoid loss of revenue, customers, and market share so practicing this can help protect your business from that. It also prevents stockouts, protects against unexpected demand spikes, and creates a long lead time buffer!
4. Streamline your Stocktake
Streamlining the steps taken to count inventory, or stocktake, can help mitigate the possibility of mistakes. A couple of ways to do this is by scheduling your stock takes, cleaning and organizing the stockroom beforehand, and knowing what you’re counting and making sure everything is actually counted.
Use Shipping Pilot to help kickstart your business and save you time! For a business that is just starting out, saving money is also crucial, which makes Shipping Pilot a great place to start! We are here to help your company with anything it needs, take it from us! Check out what else we have to offer on our services webpage.