Inventory counting 101
'Continuous improvement is better than delayed perfection'
It is a quotation attributed to the famed American author, Mark Twain, and it is interesting to consider in the context of inventory management. That's right. Inventory. The dreaded word that can send shivers down the spine of even the best retailers. Truly, the challenges faced by companies are certainly diverse, but stock management highlights a consistently tough procedure.
A poor stock management system will lead to everything from inaccuracies to shrinkage and the time-consuming, labor intensive work is only going to end up damaging your companies bottom line.
Finding a solution that is perfect however might be near on impossible, since there'll always be ways to improve it. That's why Twain's lineup is a pertinent one for companies to follow. A headline, if you will, that enables businesses to take significant steps in enhancing their inventory management methods, and ultimately their whole operations.
Here we will single out what a few of those steps can be, and how a more streamlined inventory management system can help you make smarter business decisions.
The'First-In, First-Out' is an old yet essential tenant of stock management. Self-explanatory, it naturally refers to a earliest stock being sold , before your new stock. Hence the First-In, First-Out moniker that speaks to the equation.
This is particularly vital for retailers which hold perishable goods, such as food outlets and grocery stores. Holding unsellable goods on your stock, contribute to unnecessary spoilage that wastes valuable resources and costs. Prioritising your inventory that's early expiry dates, as the first items to be sold, is simply sound business.
Additionally, the FIFO method can also be sound inventory management for companies that don't have non-perishable products. If your oldest stock is left in the back and unattended, there is a great possibility that it will show signs of deterioration. Additionally, if an item is'hot' and in season, you need those things to be sold and not afterwards as a new trend appears, and that thing becomes obsolete.
A strong FIFO means using an organised warehouse, that may prioritise instantly the selling of older products .
Cycle counting is a savvy way to avoid the awkward interruptions of daily stocktakes. By implementing a strategy in which you do partial counts of inventory over a calendar year -- if it be daily, weekly or monthly.
By keeping a rigid schedule as to when your shop will complete a cycle count, relieves you from having to do the arduous full stock counts, that forgoes company sales whilst also being unable to guarantee absolute accuracy.
Cycle counts offer more precision by focusing on a smaller array of items -- within a longer period of time -- and may also tailored to rely for particular products which are of high priority.
The ABC Method in an expansion of the cycle count in which it asks you to split your inventory by value, and prioritise stock counts for the most precious products. Commonly, that would mean you sort your products into three types:
- Best value products
- Moderate value products
- Low value products
Using these tiers, you can schedule counts that reflect their priority, together with your greatest value things being afforded the most focus. Obviously, the number of times you count your stock in a fiscal year will depend upon how much inventory you have, but the ABC method is one method that will assist you plot out that.
Par levels are the minimum number of goods that have to be in your inventory at all times. When that stock dips below that set point, you will know that you ought to be ordering more of the product. It is a handy tool to have, which will permit you to make better choices, in addition to empowering your staff to deal with inventory management better.
It's definitely a process that needs ample quantity of time in preparation -- ensuring that every level level set is in accord with the stock level movements of the product. Still, the beauty of this is it is flexible and easy to change, once the need arises.
ConnectPOS Tip: As a smart retail point of sale solution, ConnectPOS can place automated par levels that will assist you manage your stock! Establish customer re-order points on your best selling goods, so you can keep on top of your inventory.
Organise your inventory space
This might seem simple enough, but you will be amazed by how many stock mistakes can happen by unorganised stock. You want to make certain that your employees have ample space to count stock and maintain detailed records, and prevent any unnecessary mistakes.
Creating your storage space clean goes hand in hand with creating new spaces in which you can save more inventory! The more stock you shop, the more you can sell.
Utilise a Cloud POS
Alright, so a Cloud POS is what we do here in ConnectPOS but with a cloud-based really does make a difference when it comes to managing inventory. Taking into consideration the globalisation of several company, where there are several stores in multiple places -- nationally and internationally -- using a spreadsheet based solution to document your data isn't likely to be accurate or detailed enough for your company requirements.
In a cloud-based solution, all of your stock and purchase orders are upgraded in real time. Do not be bogged down by having to track individual items and earnings to learn how much inventory you have available. ConnectPOS offers you that info on tap, providing you with a wealth of information which you can gain access to any device, from anywhere on earth, at any time.
ConnectPOS Tip: Characteristics in ConnectPOS's POS is our innovative reporting feature that can help you identify trends in your sales which you could reflect by managing your stock.
To bring this full circle, improving the operations of a company, has to be carried out with continuous improvement. There is no such thing as an ideal process, and with the management of inventory becoming among the more volatile aspects in running a company, focusing on small improvements is essential.
Every little bit helps, and we expect that some of these ideas can help you streamline your stock tenfold.
Check out ConnectPOS's inventory management features to discover more about how ConnectPOS can help you streamline your inventory management.