Inefficient inventory management is one of the biggest cash drains on many businesses, depriving them of valuable working capital. Excess inventory is literally cash wasting away in your warehouse or on your shelves. So every company needs to do everything it can to minimize its inventory investment.
Manufacturing tips
If you’re a manufacturer, one of the best ways to do this is by implementing just-in-time (JIT) inventory management. It involves having raw materials delivered just as they’re needed, rather than weeks in advance.
Automation plays a big role in JIT. Back-office inventory and ordering software, combined with bar-code scanners and other software tools, is widely available today and can give even smaller companies a leg up on the competition. Bear in mind, however, that JIT systems require greater collaboration with your customers, suppliers and employees. And they’ll likely bring substantial upfront equipment costs.
Retail recommendations
If yours is a retail business, scrutinize your inventory and categorize items based on their likelihood of selling. Hard-to-sell items should be marked down and moved out to make room for more popular merchandise.
To keep the rotation of product moving smoothly, you’ve got to have the right information at your fingertips. Make sure your sales and order record keeping is based on sound, safe methodologies.
The right data — laid out in an informative, easy-to-understand way — allows your inventory managers to forecast what you need to order and how many of those items are likely to sell over a stated period. Over time, this should prevent not only running out of hot sellers, but also excessive orders and an abundance of aged items building up on your shelves.
Clean, orderly and new
No matter what business you’re in, the ideal inventory is new, cleanly maintained and organized in an orderly fashion. If you’re holding on to a lot of old items, something probably isn’t right. Please contact us for help reviewing your inventory management and gathering the right data.
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