3 Simple Changes To Improve Inventory Management In Your Business

Inventory management is an important part of business but it’s one of the things that new business owners often struggle with. You need to ensure that you have enough inventory to meet customer demand and account for any big increases in sales, but it’s equally important that you don’t invest too much in inventory to start with because this can lead to cash flow problems. Finding that balance is tough and unless you can get your inventory management right, you will run into issues further down the line. If you don’t have a clue where to start with inventory management, here are some important things that you should remember.

Categorize Your Inventory 

Categorizing your inventory is one of the best ways to make sure that you are finding a good balance. In most cases, it is best to divide your inventory into 3 categories; A, B and C. Category A inventory covers the high cost items that you don’t need very many of. Category C items are on the other end of the scale and these are the low cost items that you turn over very quickly. Category B items are the ones that fall in the middle of Category A and C. By dividing inventory in this way, you can ensure that you are not over ordering the expensive items or under ordering your most popular products. 

Plan For Busy Periods 

Even if your business is not seasonal, you will still have certain periods that are busier. It’s important that you prepare for these busy periods by ordering more stock in advance so you can still meet customer demand. You may also need to look into overflow storage units so you are not limited by the amount of storage that you have. If there are periods that tend to be a lot quieter, make sure to adjust your orders accordingly so you do not spend too much money on stock and cause yourself cash flow problems. This is particularly important if your products have a short shelf life because you will waste a lot of money. 

Invest In Technology 

When you have a problem in your business, it’s always a good idea to see whether implementing new technology could help. Inventory management systems are so effective because they allow you to accurately monitor all of your inventory. You can even set up automatic orders of certain products when stock levels drop past a certain point. If you set up an inventory management system from the start, you will find that you have fewer issues with stock levels in the future. 

When you are choosing inventory management software, it is important that you find applications that integrate well with your current system. If you use software that integrates with your point of sale system, for example, inventory is automatically updated as soon as a sale is made, which means you always have a clear picture of exactly how much inventory you have, and this updates in real time. 

These 3 simple changes will make it far easier to manage your inventory so you can avoid any issues with over or under ordering.