Making an otherwise cumbersome, time-consuming, and frustrating process simpler and more efficient will save you many headaches, keep your workforce on-task and business processes flowing, and even boost the company bottom line.
April 5, by Brad Vinson 5 Comments As a small business owner, you naturally have a lot of capital invested in inventory. Inventory takes up warehouse space, requires handling, could spoil or go out of style, and unfortunately could be lost or even stolen.
This manual mishandling of inventory opens up your operations to data entry errors, shipping mistakes, and just a lack of knowledge of what you do or do not have in stock.
This combination is a recipe for customer dissatisfaction and potential loss of sales. Here are some guidelines to follow to streamline your business for success. Would a continuous review or periodic review system be best?
With a continuous review system, you normally order the same quantity of items with each order placed. You must monitor inventory levels, and whenever the quantity of an item drops below a set level, you would then replenish your stock. When using a periodic review system, you order products at the same time each period.
At the end of each period, you determine how many items need ordered based on quantity levels at the end of each period. There are also no set reorder levels for this type of system. Inventory Control Return on Investment 2. Make Your Cycles Count To be successful with inventory management, you must implement a cycle counting program.
Before you do, think about these factors first: How many counts can your workers do each year? What are the effects of cycle counting on manufacturing, receiving, and the delivery processes?
Once you have a grasp on your counting frequency, you can then plan whether to divide inventory between locations or by category, item, or value. Find a trusted employee that will be responsible for running a tight cycle count system.
This is critical to reap the benefits of such a program within your business. For example, the number of items kept in the warehouse would differ drastically between a fresh food delivery service and a clothing manufacturer.
An inventory management system will help you know what inventory levels would be the most beneficial to the flow of your unique business.
You can track important data, including seasonality, sales patterns, and past turnover and make more educated business decisions as you grow.
Implement Quality Control Quality control is of utmost importance in any size business and should be implemented as early as possible. Having a process to ensure quality can be directly linked to customer satisfaction and business growth.
Starting quality control procedures can be easy as making a checklist that provides all procedures employees need to follow when checking the goods they receive.
For example, you could ask workers to examine products for the following: Leaks, tears, or broken seals Product colors, styles, and sizes: All must be identical to the description on the purchase order Prices and terms of sale When all employees are working toward the same goals, quality will increase.
This inventory management best practice prevents unnecessary increase in stock levels, and employees will no longer offer customers inappropriate merchandise.
Once products meet quality requirements, consider the warehouse environment in which they will be stored. Optimize The heart of good inventory management is the knowledge of what you have in stock and managing it well.Just like Phillipa Roberts, the best first step towards inventory management best practices is to find the right inventory control system that will utilize barcodes and offer instant data capture and custom inventory tracking.
Keywords: Inventory Management Practices, Financial Performance, SMEs Introduction It is widely recognized that at all levels of development, Small and Medium-Sized Enterprises (SMEs) have a significant role to play in economic development in general .
Inventory management isn’t something many professionals enjoy thinking about, even those who work in the field. That’s one of the primary reasons it’s helpful to implement best practices that are proven to streamline inventory management processes. This paper examines the impact of inventory management practices on the financial performance of sugar manufacturing firms in Kenya, by analyzing the extent to which lean inventory system, strategic supplier partnership and technology are being applied in these firms.
THE INFLUENCE OF INVENTORY MANAGEMENT PRACTICES ON ORGANIZATIONAL FINANCIAL PERFOMANCE: CASE STUDY: NATIONAL MICROFINANCE BANK HEADQUARTERS Inventory Management Practices on Organizational Financial at the National inventory management practices on return on equity?; and iii) What is the effect of.
Therefore, an affective inventory management requires that a firm should maintain an optimum level of inventory Current inventory practices of Real Estate Developers – A case study 20 National Institute of Construction Management and Research, Hyderabad/5(2).