Stock inventory management is one of the more frustrating areas when it comes to running a business.
And if a big range of items or products is being sold, the stock becomes increasingly more difficult to manage.
However, it has to be done. Stock management has to be a priority if the business has any hope of developing or surviving.
The question is whether the time and effort that go into inventory management really worth it? Here are five reasons to answer with a “yes”.
1. Maintain The Profit Margin
When you strip a business down to its core, the main idea is to generate a profit.
Without a significant profit, there will not be enough finances to take the business forward.
And what about just keeping the establishment competitive? Profit needs to be at the centre of the bigger picture.
However, when inventory is not managed properly, it causes problems. The fact is a lot can happen between the delivery, storage, and sales points.
There is also the possibility of discrepancies between system numbers and what you physically have on the shelf.
So, it is very risky to simply assume the stock will balance out if everything goes smoothly through all the departments from receiving to the POS.
In fact, if you leave stock issues long enough, you eventually discover how little profit you are making.
And with proper inventory management, you can spot this problem before it ruins the business.
2. Assessing The Value Of Stock-On-Hand
It is natural for a business to measure performance.
For example, comparing figures from last year with the current year is a means of measuring performance.
However, if you want to do this accurately, the inventory side has to be up to date.
In other words, are you prioritising regular cycle counts to make sure everything is in balance?
Do you use high-quality equipment to make inventory management more convenient and accurate?
If you have not been doing this so far, you may want to start paying deeper attention to stock movements.
3. Pinpoint Problem Areas/Old Stock
It is not something any business owner wants to admit, but theft can be a major factor, especially in retail stores.
In some cases, the personnel are actually responsible for the missing stock. However, this can be picked up with regular stock-taking.
It will also deter personnel from taking chances once they realise how in-depth your inventory management system is.
The same problem can be found with old stock that is not moving.
It can easily happen that old stock is forgotten in storage, and may even eventually surpasses expiry dates depending on what is stored.
Once again, the right management will help to avoid stock from going to waste.
4. Make The Ordering Process More Efficient
For the most part, purchase orders have cut-off times. This is logical considering suppliers cannot just load something at the last minute.
However, a lot of time is wasted when orders have to be done via physical inspections.
Going to the shelf or into storage to check what you need is not an effective system.
When you can start trusting the numbers on the system, there is no reason to leave your work station in order to accurately finish a purchase order.
5. Provides Valuable Information Regarding Sales
Finally, regular stock counts and overall inventory management give you a clear picture of what is selling.
At the same time, it indicates what stock you should consider putting on sale if you ever want to make space in storage.
A Final Thought
When you use the smart approach for stock inventory management, it can really help you maintain perspective about your business.
If you would like to know more about the best stocktake software and how the right set of software and point of sale systems could help you, give us a call.
Our team would be happy to discuss your needs and to help you build new, more efficient workflows that will support the best operation of your warehouse or store.
We have the right tools for companies of all sizes and will work to accommodate your business, supplying you with technologies that are tailored to suit your business to help improve your efficiency and accountability.
We are the market leader when it comes to the development of customised and packaged solutions.
This includes Inventory Management, Portable Barcode Readers, Supply Chain Management, Time and Attendance and Asset Tracking to name but a few.
Please call us today on 03 9578 7600 or 1800 061 642 or contact us through our website on https://www.asp.com.au/contact-us/.
