Business Owner’s Basics: Tips and Tricks for Taming Your Inventory Control Operations
Inventory. Almost every business has some, and it must be managed effectively. Without a great stocktaking system in place, inventory can get out of control in a hurry.
Some businesses do well when they manage inventory manually. Others use special inventory management software to tackle the job. Either way, things can go wrong. If you start noticing that your inventory is spiraling out of control, you’ll appreciate the following tips and tricks about inventory control operations.
What is inventory
Inventory can be a list of everything related to your business. In a warehouse management, inventory can consist of goods in stock. In building management, inventory lists the content of a building.
Inventory can be categorized in four ways, says Info Entrepreneurs: Ready-to-use components and raw materials are one sort of stock. Unfinished goods that are in the process of being produced are another. Finished, for-sale goods are the third sort of stock, and consumables including stationery and fuel are the fourth. Additionally, inventory may be sorted into low, medium and high value categories.
High inventory vs. low inventory
Some companies choose to store plenty of inventory at their business location. Others opt to maintain relatively low levels of inventory. Keeping a lot of inventory on hand tends to reduce the cost of inventory management. Another advantage of keeping high levels of stock is that the business won’t run out of anything they need. Bulk buying to amass high levels of inventory may be much more affordable than buying piecemeal items, as well.
To determine if you ought to maintain high or low inventory levels, ask yourself these primary questions: Do you have a regular and reliable supplier of the goods you need to inventory? Are alternate –and possibly more affordable– sources available? Can you predict your company demand for a particular inventory item? Is the price of inventory items expected to hold steady? Can you get a deep discount if you purchase inventory items in bulk? Knowing the answers to these questions can aid you in making the decision to stock a lot of stuff or a little. Either way you go, you will need a way to control your inventory.
How stock and inventory are handled
Stock may be controlled manually or by way of specialized computer software programs. Taking inventory, also known as stocktaking, is a method that’s served companies for a very long time. Manual stocktaking may involve the use of a book or inventory cards. In either case, things such as value, description, location and supplier details are noted, along with stuff like re-order levels, lead times and quantities. Additionally, data such as price, SKU, UPC, retail product price and an image of the item may be may also be noted on stock cards or in an inventory book.
Manual inventory-taking can be facilitated by technologies such as barcodes and barcode scanners. Radio Frequency Identification (RFID) tagging utilizes handheld readers and offers an efficient way to keep an accurate eye on inventory levels. Once on a sales floor, RFID tag technology can reduce inventory loss by alerting staff to any product that leaves the premises before being purchased.
Barcode vs. RFID tag
Barcodes are black and white, line-filled boxes that are read up close with a handheld scanning device. Only one barcode can be read at a time, making the process a trifle tedious for inventory-takers with a lot of things to assess, says Entrepreneur magazine. RFID tags utilize radio frequencies to note inventory details and can be used at some distance.
More than one RFID tag can be read at once, too. This feature may make RFID inventorying exponentially quicker and easier than manual barcode scanning with a handheld device. Either inventory method is preferable to manual entry into spreadsheets which are notoriously prone to error, especially when more than one person is adding to them.
A great inventory management system provides up-to-the-minute data about the stuff you have in stock. It can tell you what’s selling and which items are languishing on store shelves. Accurate inventorying gives you all the information you need to sniff out theft and increase the bottom line of your small or large business.
Running a business can be a less complex process, especially when your inventory is easily monitored and managed.
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