A key aspect of inventory management is tracking product information. This information includes the SKU, barcode, suppliers, and lot number of each item. Dead inventory costs money in storage fees, while seasonality and trends affect the movement of products. In the case of fast-moving products, spot checks can be done for specific items. Spot checking is a good way to make sure you have enough of a product in stock to keep your customers happy.
An inventory management software allows you to monitor stock levels, allowing you to move unsold products quickly. A well-made inventory management software can also help you recalculate your inventory in the event of an unforeseen sales demand. Accurate reporting is essential. A good inventory management software keeps you updated, reports, and helps you avoid human errors. Software also helps you optimize the location of your warehouses and minimize shipping costs. Once you’ve implemented an inventory management solution, you’ll be in a position to predict when to reorder items and when to reorder them.
Inventory management is a vital part of the supply chain. It follows the flow of goods into and out of the warehouse. It includes various components, including demand planning, procurement, production, quality, fulfillment, warehousing, customer service, and distribution. It is important to note that inventory management can only be effective when it is well-integrated into the supply chain. It will ensure that your business is able to keep the right levels of stock at all times.
Another important component of inventory management is tracking. The days inventory outstanding are on the rise, meaning your inventory may be sitting around for a long time, and that means you’re losing money in the process. Keeping track of your inventory in real time can prevent your inventory from going bad and causing a stockout due to poor forecasting or unexpected changes in demand. Inventory management software also helps you identify dead stock and unused items, a critical aspect of effective inventory management.
An effective inventory management system allows you to know the exact amount of product units you need to sell. Inadequate inventory leads to lost sales, stockouts, and poor customer service. Improper inventory management can also lead to waste and a high rate of errors. For example, having too much inventory may lead to products spoiling before they can be sold. This can reduce the cash flow of the business. Keeping the right amount of product on hand is essential for a successful business.
Another vital element of inventory management is setting a reorder point. A reorder point is a threshold of inventory where you must restock inventory in order to avoid supply-chain breakdowns, production delays, and other problems. Using an SKU reorder point formula will help you determine what the safe reorder point is for each product in your inventory. In some cases, you may have to sell less than the actual quantity, so be sure to set a higher reorder point than the original amount.