Dealing with your inventory isn’t simple. It always involves too many calculations and we may often end up making lot of errors while calculating and which could lead to loss in sale. Managing the inventory provides an opportunity to increase the sales and business.
As your business grows, the online and offline sales channels connected with it will grow and it is unavoidable. Regardless of what we sell and how we sell, managing the inventory appropriately by overseeing inventory across all business channels can be the way in to prosperity and the success mantra. In order to best maximize the efforts and keep the inventory off the shelves, here are few tips to follow.
The business and sales forecasting is significant consistent all through the year. Demand forecasting will help businesses to predict what the customer wants to purchase, the quantity they require and when they require. Using the historical sales data demand forecasting can help indicate as to how much of a particular product is likely to be sold in a specified future period in a specified market at specified price. It helps to determine production volumes considering availability of facilities, like equipment, capital, manpower, space etc.
Optimize Supply Chain
The logistics of your supply chain can also improve inventory turnover ratio. We spend a lot of resources on tracking, storing, and warehousing inventory, it greatly impacts your bottom line. It’s better to organize your process with the goal that they work more productively and efficiently. An optimized Supply Chain process helps with an organization with the below;
- Cost reduction
- Boosts Revenue
- Best improves the suppliers performance
- Cash-flow management
- Sales forecasting
- On Time delivery
Avoid Under-stocking or Overstocking
A poor inventory management always has its consequences. Hence it is always important to understand how under stocking and overstocking inventory affects our business as a whole.
Under stocking Inventory includes out of stock items or shortfalls that may cause cancelled orders or unfulfilled orders to pile up. It leads to missed sales opportunity affecting the sales directly. Similarly Over stocking mostly ends up in dead stock if it goes unused for long costing us on warehousing the materials. Wear and tear of the surplus inventory also decreases the value of your inventory over the period of time. To conclude it is always necessary to set an alert for minimum and maximum inventory level when the stock reaches a certain threshold to avoid under or over stocking.
With the right inventory optimization strategies for the business, we will have the option to run a more effective supply chain. This results in well-managed warehouse thus helping to boost the efficiency and productivity of an organization and results in reduced errors and lower your expenses.