If you are still managing your inventory through spreadsheets or, worse, not managing it at all, then you’re doing it wrong. Without proper inventory management, not only are you going to lose most of your customers eventually, you might even be forced to close down.
Inventory management is critical to one’s business because it allows you to run through your stocks, supply resources to in-demand goods, and even track your products in and out of the warehouse. You’ll be unable to balance demand and supply without proper inventory management.
That said, inventory management can be very challenging, especially if you don’t know what you’re doing. This is especially true if you’re a small business owner who recently started. If you are facing tracking and management issues, you’ve come to the right place. In this article, we will be talking about inventory management and why it is important for your business.
Just for a quick recap, inventory management is a set of processes that you utilize to supervise and organize everything inside your warehouse or facility. It’s an important component of supply chain management, and it oversees the operations and the flow of goods that go in your warehouses.
A business owner needs to know how crucial inventory management is to their success. Simply put, with proper inventory management, your production and process will be much faster, easier to manage, and it will be much cheaper to do.
On the other hand, it will help customers track the goods they ordered and will be delivered to them quickly and efficiently. It’s a win-win situation where your business will be much more efficient in its process, and the customer stays satisfied by having their goods delivered at the right time.
If you’re convinced to take inventory management seriously, getting inventory management software is a good decision. Any inventory management software worth the price should include a basic economic order quantity or EOQ calculations. EOQ helps you identify and calculate the most cost-efficient method for ordering your products.
It does the calculations by weighing the costs of storing your products and the costs of ordering your products. It might sound complicated, but you don’t have to worry about it. Inventory management software with a built-in EOQ can automatically do the calculations for you.
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Products that don’t sell are a loss for a company. You already paid for the product to be made, as well as for its storage costs and the shipping for materials. However, you can’t recoup those costs because they can’t be sold.
With inventory management comes forecasting. As the name suggests, forecasting is the ability to track the products you make and estimate how they will sell in the future.
This process checks your inventory level, and with inventory management software, this could be done easier. It’s completely automated and faster than doing the numbers yourself. Also, it’s more accurate, so you don’t have to worry about mistakes in calculations.
And with inventory management software, you can integrate your point of sale system to update your stock numbers in real-time. With that, you’ll have more accurate predictions, which can help you determine the stocks you should increase and the ones to avoid.
Plus, your software can recommend the exact number of units you should order and when you should order them. This way, you don’t have to worry about overspending on warehouse storage while still having the supply to meet the demand of your customers.
Some inventory management solutions can also integrate warehouse management. This prevents your goods from ending in the wrong place or being delivered to the wrong people. In short, the feature helps you maintain the organization and the processes that happen inside your warehouses and facilities.
It also helps your employees pull items for their customers with greater accuracy, improving customer satisfaction. Also, it reduces the chances of a product getting lost because of the lack of tracking access. With tracking, you can find materials and goods lost either in or out of the warehouse.
If that happens, you can immediately acquire the lost goods and deliver them as fast as possible to the customer. Also, it can help you with estimating how much time a product will be delivered so you can give your customers an ETA for their ordered goods.
Inventory management is one of the crucial aspects of a business. Without it, you won’t acquire materials when needed, leading to incomplete orders and unsatisfied customers. It’s the lifeline of your business that can either make or break your company. And with inventory management software, inventory management will be much more efficient and fast.