Counting and managing stocks manually is very tiresome and unnecessary in the current world and it is no wonder people are shifting this process to more automated solutions. Managing inventory is very important for any business. The more accurately you manage your stocks, the better you can make use of the stocks.
New businesses often do not know where to start when it comes to inventory management. If this problem resonates with you, then give this article a read. Here we discuss some tried and tested strategies to help startups and small businesses effectively manage their Inventory.
1. Using Old Inventory Items First
A very easy way to figure out inventory for a particular amount of time is to see how much of the old stock has been used and how much is left over. There is certain software like ERP and MRP to help you calculate the number of raw materials required for your product but it is always a better idea to have some extra materials in your hand in case you encounter some shortage. Also, in case you have any materials left over from the previous cycle, make sure to use it up first in the next cycle so that they won’t become outdated.
2. Checking or Auditing Inventory
This tip is closely related to the tip mentioned above. Factories that work with a lot of raw materials always have a ton of leftovers. These have to be inspected from time to time to ensure that they are not outdated. There should be an auditing team that reviews the stock to ensure that the leftover stock matches with the stock amount that was calculated when the raw materials first came in. An easy way of inventory management for small business is to check the unused stock and compare it with the number of units that have been used.
3. Using MRP Software
A change in demand from the customers will directly impact your inventory management process as it is closely related to production. Using MRP software, you can assess the customer demands and keep track of the manufacturing process at the same time to ensure that both are balanced with respect to each other. Purchase of raw materials becomes easier if you use the data from the software. Thus, MRP software is a must in every manufacturing business.
4. Using Artificial Intelligence to Control Inventory
Artificial intelligence has made a deep impact in almost all major businesses in every market. It helps in automating a lot of tasks so that employees can concentrate on what they are meant to do without any distractions. A combination of artificial intelligence, demand sensors, and Internet of Things (IoT) can help cross-reference the data provided by an ERP system. This data will automatically take consumer trends into consideration and the AI system will automatically order the number of raw materials you need so that consumer demands can be met without any wastage of resources.
By implementing the tips mentioned above in your business, you will surely get started on the right track and be on your way to efficient and effective inventory management. If inventory management is done properly, it will help you gain profits as well as avoid wastage of resources.