The concepts of managing and maintaining inventory can spell frustration for employees at organizations without strong strategies in place. In the past – and still within many businesses today – managing inventory involved a manual, physical count of what's stored on premises, and reconciling this against the inventory count on record. However, techniques for inventory management have advanced considerably, and there are key ways to streamline and better support this process.
Inventory is a physical representation of the company's financial resources, making it considerably valuable. Proper management can help support these investments while saving the organization money and improving efficiency. Let's examine a few emerging strategies today's companies are leveraging to improve their inventory management:
Categorize accordingly
First and foremost, it's imperative that stakeholders take the time to organize their inventory according to specific product/merchandise categories. These different categories will vary from business to business, but it's most beneficial to establish groups that align with the company's inventory. This might include separating products based on their value, use cases, departments, etc.
Once stakeholders have created these categories and warehouse personnel have separated inventory accordingly, it's important to leverage a robust inventory database to support product organization and visibility.
"Storing all of this information in a central database is the key to maintaining precise control over your inventory, quickly finding the information needed, and analyzing the data collected to further optimize your inventory processes," noted Camcode contributor Nicole Pontius.
Regularly scheduled auditing
This is the process that many managers and employees view as overwhelming, particularly when it must be done manually. Thankfully, many organizations have automated software in place to help with inventory counting and reconciliation as part of their audit. But the bottom line here is to ensure that the company's records match the level of inventory they have on-hand.
Shopify contributor Casandra Campbell pointed out that while many organizations still utilize an annual physical inventory count – which often matches up with accounting and income tax periods – this process can be time-consuming and difficult. Since they're only done annually, any discrepancies resulting from these counts become much more difficult to trace and resolve.
On the other hand, businesses can instead use a spot-checking strategy, where counts and reconciliations are completed several times a year. Often, these spot checks involve a single product or category, focusing on any particularly problematic or high-demand products.
Remain on top of reordering
Another issue with inventory management comes up when stock is running low. This can be especially impactful when a company's popular items run low, and it's imperative that stakeholders are on top of reordering before inventory runs out.
Leveraging an advanced software solution that includes an inventory management component can be of great benefit here. A best-in-class solution can enable automatic reordering of inventory when product levels are low, or for the release of backorders when needed.
