Goals of Inventory Management
by Heather Topham Wood, Demand Media
Target: Get your inventory under control with good management practices
Inventory management is essential for a business to succeed. Good management of your company’s stock decreases excess inventory and ensures that you have enough product on hand to meet customer demand. Develop an inventory management plan to streamline ordering and reduce wasted time on inventory control.
Ensuring Safety of Inventory
One of the goals of inventory management is to keep products safe. Inventory should be kept in a safe area, where it is protected against theft. Depending on the size of your company, this could mean using surveillance equipment, guards or alarm systems. The inventory should be handled carefully, as well, to avoid breakage. Broken or lost inventory means a financial loss for your company.
Tracking Sales
Track and review company sales on a regular basis as part of your inventory management plan. Note the items that don’t sell and have a tendency to sit for prolonged periods of time. Also, track the best sellers and seasonal items that experience increased sales at different times of the year. Use this data to manage the quantity of items and when to order them. Although you want to avoid excess stock, don’t be too safe with ordering inventory. You don’t want to be out of stock when new orders are requested.
Ensuring Accuracy of Inventory Systems
Manage your computer inventory systems. Incorrect information displayed on inventory databases can cause problems in your company. A goal of inventory management should be to keep the inventory database up to date. Each item sold should be removed from the inventory log promptly. Stock receipts should be entered into the inventory database within a 24-hour period.
Eliminating Excess Products
Inventory control also will keep dead stock off of the shelves. Stock that does not sell drains company’s resources because it takes up space in your store or warehouse. Sales events can be used to push stock that has not been performing well. Another strategy would be to return stock that is not selling or offer the products at a discounted rate to another company.