Practical Tips for Improving Inventory Management in Your Small Business
By Marcus Lansky
Mismanaged inventory is one of the leading causes of small business failure. And if you’re a goods-based business, chances are no one needs to tell you about the importance of controlling your inventory on a daily basis. Nonetheless, inventory management is also one of the most challenging aspects of running a business, and there are many mistakes that can be made in a variety of ways.
If you’re overwhelmed with where to start with improving your inventory process, you’ve come to the right place. Below you will find practical tips for getting a better grasp on your inventory management and putting your company in a position to flourish.
Adopt warehouse management software and tools.
If you’re still using Microsoft Excel to keep track of warehouse operations like dispatching items, tracking shipments, and taking in returned items, then it’s time for a change. By investing in a top-notch warehouse management system, you can ensure your supply chain is running effectively and efficiently, leading to excellent inventory management. This, in turn, can do wonders for your customer satisfaction rates and overall business success.
Another form of warehouse management to consider investing in is an automated storage and retrieval system. Aided by computers and robots, AS/RS are essentially systems that physically store or retrieve items in a warehouse. Not only does this type of system help to reduce labor costs, but it also increases accuracy, efficiency, and productivity in the warehouse. Moreover, AS/RS systems can increase safety in the workplace because it reduces the need for workers to lift and move large items.
Bring freelancers on board.
If adopting a new warehouse management system sounds like an overwhelming task to take on by yourself, consider hiring freelancers to handle it. By going through online job boards, you can find qualified freelancers who specialize in everything from web development to engineering to admin support. For example, you could hire an ecommerce specialist to build a web dashboard that helps you with inventory management. You could also hire someone to set up a full-on inventory management system and monitor it on a recurring basis.
Predict future demand.
Along with upgrading your inventory management systems, make sure you are forecasting. Study current market trends and past sales, and take your present inventory into account to predict future demand for your products. Good forecasting will help you to avoid ordering too much or too little of any particular item. Obviously, you don’t want to lose sales or clients because you’re out of stock on items. But you also don’t want the overhead costs, property taxes, and decreased liquidity that comes with an overstocked inventory.
Hire qualified employees.
Nothing can kill your cash flow quite like unqualified employees. When it comes to inventory management, make sure you are hiring qualified and trustworthy workers who can get the job done efficiently. Along with experience, each inventory manager on your team should have the motivation and ability to learn new inventory management software and methods on a regular basis. If you have employees who possess the soft skills necessary for the job but lack some of the task-specific skills, you can always invest in training them rather than hiring new employees.
It’s hard to overstate the importance of inventory management for a goods-based business. Be sure to look into warehouse management software and tools that can bring your warehouse operations to the next level, and consider hiring freelancers to help set up and run them. Also, prioritize forecasting, and make sure your inventory managers are qualified and adaptable. If you implement these tips, you’ll be on the right path to transforming your inventory management and leading your business to success.
