3 Inventory Management Practices That Save You Money

Loss of inventory control is one of the fastest ways to undermine any enterprise. Retail stores can have back stock that will accumulate to the point of hindering sales, and warehouses are a mess without proper inventory management. Generally speaking, poor inventory management is just bad for business. Below, we discuss three ways to help get your inventory under control and save money.

Regular Auditing

Conducting audits of your inventory is one of the easiest ways to keep tight control over it. There are various methods of inventory management, but a simple audit can present a clear picture of precisely where you stand at any given time.

Knowing exactly how much of something you have on hand is essential to making a profit. If you do this on a regular basis, you’ll soon know which items are bad investments and which ones are easy to move without significant promotion. It will also sharpen your order points.

Understand Your Lead Time

Lead time is the total amount of time it takes from the point a customer places an order until it is shipped, including any time needed to manufacture or receive materials for the finished product. Knowing what your lead time is for your entire stock is important because it allows you to use your time more wisely. You will know how many employees are required to prepare a shipment and how long it will be before you can expect payment. This knowledge allows you to allocate additional time and resources to other projects. 

Lean manufacturing lends itself to making excellent use of lead time. In essence, this is a practice by which a business minimizes waste without sacrificing productivity.

Automated Inventory Management

It is surprising to find out that many stores, businesses and warehouses still don’t use automated inventory management software. This software can be integrated into the register of a retail shop to automatically keep track of exactly how much product is on hand. Some of this software can even work alongside the technology your wholesalers have, enabling you to know ahead of time exactly what stock they will be sending next. There are many different software programs to choose from, and one can be specifically tailored to your business.

Getting your business under control and running smoothly begins with a good understanding of inventory management. Once you have mastered the three methods above, you shouldn’t stop trying new things. You’ll come to realize that you can always further refine your inventory management. 
When starting your own business, inventory management is important, but so is having a good website. Read more here about what makes a great website!