If you’re dealing with tangible products, you know that inventory management is one of the crucial aspects of your business operation. You’d want to ensure that you have enough stocks to meet the demands of your buyers. At the same time, you don’t want to keep items with slow turnover rates. Aside from these concerns, another thing to check is your inventory costs.
Executing the right inventory management strategies will allow your business to save on unnecessary expenses. By checking your software, processes, and existing workflow, you’ll be able to detect which areas can be improved in order to prevent more costs.
Here are some ways for you to control management inventory costs more effectively.
1. Consider MRO Inventory Management
The MRO, in this context, refers to the maintenance, repair, and operation of machinery, equipment, and tools needed to run a business.
Any business dealing with inventory products should consider its MRO inventory too. Maintenance and repair materials, along with operational activities, are included here. For instance, this also tracks the uniforms, protective equipment, cleaning supplies, office tools, safety equipment, and other things necessary for maintaining a business. MRO inventory management also includes wearable goods like uniforms and protective gear.
While it’s necessary to conduct inventory on the products you sell, some businesses overlook holding inventory for their maintenance, repair, and operation aspects. The truth is controlling and optimizing MRO inventory replenishment is crucial to ensure better work productivity in the business. In order to manage MRO inventory effectively, you should identify the critical maintenance, repair, and operational processes and inventory items required to maintain business continuity.
2. Try Not To Overstock Inventories
Your business could miss out on new growth opportunities if you spend a large portion of your budget on replenishing stock.
Overstocking is a common mistake in businesses, and they’re holding out more expenses this way. However, this could be really tempting since the more order your deal with, the larger discounts you can earn. Before you take the bait, you must consider the cost of opportunities you may lose.
Because you think you’ll need to reorder products at some point anyway, accepting deals and discounts might seem like a good way to save money. Nonetheless, there’s a large possibility of incurring deadstock when these products take a long time to fly off the shelves. As a result, you’re paying a lot for the price of storing products.
It’d be much better to spend money running a new marketing campaign rather than storing deadstock. Henceforth, it’s crucial to order the right amount of inventory and not overstock products, especially those with slow turnovers.
3. Use A Centralized Inventory Management Software
When you use multiple selling platforms and sites, managing your inventory can be pretty challenging. Tracking your inventory separately for each channel puts you at risk of making an error or overselling. Inventory management becomes more difficult as your stock grows. This is even more confusing when you operate both brick-and-mortar and eCommerce stores. Before you feel overwhelmed, do know that the key is to use centralized inventory management software.
A centralized inventory management system is necessary. You can easily determine when you need to replenish your inventory across all channels by monitoring your stock from a single point. Instead of using manual inventory methods or outdated spreadsheets, it’s time to up your game and invest in good inventory management software.
Ensure you select a robust platform for managing stock levels across warehouses and channels. By having this solution, you won’t ever have to fear under or overselling.
4. Integrate SKU Technology
Another way to cut costs with your inventory management is to take advantage of cutting-edge technology like the stock-keeping units technology. This is also one way to diversify your inventory management. This is the right method that helps you to identify products easily. This identifies different products no matter how similar they can be.
For instance, a product that comes in different colors, designs, and sizes can all have different SKUs, which will help you conduct inventory smoothly. Managing your SKU data in one place helps you understand how these products are really performing on the market for these products.
5. Take Time To Audit Inventories
Manually checking your inventory is still necessary even if you have a great, systematized inventory management system that reduces human error. Once in a while, you should hold an audit system for your inventory management processes. In addition to using reports and software for tracking your stock, you should physically check your inventory to ensure it matches your current records too.
The key is to schedule a regular audit for your entire inventory. This can be done once annually. You can designate an auditing team to hold this process. Another approach is to do spot checks. In addition to scheduled inventory checks, the auditing team should perform spot checks by picking out a specific product, counting it, and comparing its quantity to what’s recorded.
Conclusion
The tips above can help and support your inventory management practices to eliminate unnecessary costs. Remember to consider your MRO inventory management and use a sturdy cloud-based inventory management software solution. All these and more tips are necessary to improve your business inventory more and more.
