9 Best Inventory Management Practices in Small Businesses

Effective inventory management is important for cost control purposes. Startups and established businesses should focus on effective inventory management to ensure that they continue to thrive in the competitive landscape.

Company management should implement controls for effective tracking of inventory. Safe stock levels must be set to ensure operations continue without any breaks. In this blog, we will go over some important inventory management tips for startups and small business owners.

Just in Time (JIT) is an effective inventory control strategy. This method allows cost-effective monitoring of inventory. It allows for analyzing past data regarding customer buying behavior and demand. You then make an order from a vendor to ensure only the required quantity is added.

A JIT inventory management is suitable for e-commerce companies. This method is also appropriate for companies that build customized products such as luxury cars and watches. Moreover, service-based businesses can also benefit from the JIT method for inventory management.

ABC inventory control method involves assigning importance to inventory items. Using the method, you categorize inventory items from the most value to the least value. The control method allows employees to focus on items that make the most money for the company.

Goods are priority stock that require strict controls. You should opt for a smaller quantity of costly items. Moreover, it is important to secure the items by storing them in a locked facility.

B items are middle-value products that require more frequent re-orders. They are generally less costly and thereby require more lenient stock control measures.

C items have the lowest values among all items. Examples of C-value items include nails and packing material. You must keep a large stock of these items to gain from cost-saving benefits.

3. Inventory Tracking Technologies

Inventory tracking solutions greatly help in monitoring items at different points of the supply chain. The software solutions allow accurate tracking of thousands of items in an inventory. The use of technology results in cost-effective and efficient inventory monitoring.

You must select an inventory management solution that provides real-time information. Also, the inventory management software should have time-saving features such as barcode scanning and mobile integration.

Also, you must consider an inventory management app that integrates with other platforms. You should select an inventory management solution that can integrate easily with the warehouse management system, POS, accounting, and eCommerce platform.

4. Cloud-Based Inventory Management

Cloud-based inventory management makes it much easier to keep track of inventory. You can use the online inventory management app to monitor inventory from anywhere. The online app also allows a different team to keep stock of inventory.

A cloud inventory management solution saves costs in tracking inventory. You don’t have to keep costly servers for storing inventory management data. All the data regarding inventory is stored on a remote server of the vendor. This results in the more cost-effective management of inventory.

A benefit of a cloud inventory management solution is that there is no installation or downloads. You don’t need to configure the software on each user’s computer. The software can be used straight away by logging into the system.

Yet another benefit of cloud inventory management software is that the data is backed up automatically. There is no need to manually back up the inventory data thereby saving precious time for employees.

5. Computerized Billing Systems

Computerized billing systems have replaced the manual process of keeping track of bills. The point of sale (POS) system makes it possible for businesses to operate in multiple locations and keep track of items at each location.

Using a POS system saves time in monitoring inventory. It automates the process of inventory management and saves time in monitoring inventory items.

6. RFID Feature

One of the innovative features for keeping track of inventory items is a radio-frequency identification (RFID). The feature allows all SKU items to be tagged using an RFID microchip. The chip contains information about the type, date of manufacturing, price, and other important information regarding the inventory.

RFID allows greater flexibility in recording information. It automates the task of monitoring inventory which allows efficient tracking of inventory items.

7. Barcode Scanner

Barcodes are an alternative to RFID for keeping track of inventory items. The feature involves assigning barcodes to items. The barcodes can be scanned using a barcode reader. This helps in keeping a record of the item including price, type, serial number, and other information.

8. Setting Safe Stock Levels

Safe stock levels should be set carefully after evaluating requirements. It is important to keep the stock levels at hand before reordering items. The safe stock levels should be constantly adjusted based on the requirements of the business.

9. Deploying an Inventory System

Businesses need to consider different factors in implementing the right inventory control system. Before selecting an inventory management software, it is important to assess the business needs. Find out about your requirements and compare them with the available features of the software.

It is also important to make sure that the inventory management solution is scalable. You should be able to purchase additional inventory management resources as the business grows over time.

Training is important to ensure that the company personnel can use the software for inventory management. They should be trained to use online inventory management solutions for an accurate record of inventory. Make sure that you implement accountability in the use of inventory management software.

Lastly, you should consider having a backup net service provider. This is important since online cloud applications rely on internet access. An uninterrupted internet connection will ensure an accurate record of inventory items as they move from one location to another within the supply chain.

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