What should you keep in mind to ensure effective decision-making in inventory management?
- Strategic inventory management techniques
- Understanding your target audience
- Consistency in planning and execution
Making decisions is a part of the responsibilities of all the leaders in an organization. Because of the uncertainty that some decisions bring to a business, people would much rather be the ones who are following orders instead of the ones who will come up with them. However, decision-making does have an effect on what is known as inventory management in the Philippines.
Decision-making is something that is already uncertain on its own, but with the right strategies and planning, you can encounter a rather expert-like process. When it comes to inventory management, the decision you make will ultimately dictate how effective and efficient your processes will be.
Keep in mind that inventory management revolves around the proper monitoring of goods from storage to the hands of your customers. This includes things such as inventory trackers and point of sale systems. In the Philippines, there are numerous strategies and guidelines that influence the decision-making process in order to ensure a very effective inventory management system all throughout the way.
Incorporate these few concepts in your decision-making process and watch as your inventory management efforts become easier and more effective!
Strategic Inventory Management Techniques
Although there are times when you have to decide on something on the spot, you should still find the time to think it through. Always strategize first and look at the bigger picture when you’re going to decide on something as big as which products will be the priority for your efforts or which of them will be shelved temporarily.
Make use of inventory management techniques and the concepts that revolve around them. Each technique focuses on a certain process and is particularly viable for certain industries. For example, the FIFO or First-In-First-Out technique basically tells that you always sell the oldest product to ensure that you won’t have any obsolete inventory. This technique is often used by both the food industry because it prevents ingredients from spoiling and the fashion industry to move certain clothes that are seasonal.
Among the many inventory management techniques, there is sure to be one that will complement the system your business uses. Discovering the best one can be a challenge, but it will be well worth it. Always remember to keep in mind the techniques and processes primarily used in your inventory management efforts whenever you have to decide to drastically change something!
Understanding Your Target Demographic
Not all of your customers are going to be the same. In truth, some of them might be more important to your business than the others. Keep in mind the 80-20 principle which states that 80% of your sales come from 20% of your customers. This shows just how important knowing your customers is to the improvement of your inventory management process. You should give more attention to the customers that contribute the most to your profits.
Inventory management software gives you the necessary tools to gather data about your customers. Some of them are incorporated in other systems such as point of sales, inventory monitoring systems, etc. It can analyze buying patterns, sales data, demographics, and so much more. All of this will be a huge help in the deciding on which segment to focus on and with what products to target them with!
Including your target market in every decision-making process you do is natural. Most of your decisions revolve around what the customers want and what will best benefit them.
Consistency in Planning and Execution
To ensure an effective inventory management system is to create a plan of action that should be constantly followed. This makes it easier to monitor inventory and spot flaws in the system! Generally speaking, once you’ve decided on a specific flow for your inventory, it will be hard to change, especially when it’s something that has been done for a long period. But this doesn’t mean that you shouldn’t change things when problems arise.
Remember that there will always be room for improvement. Whenever you find the opportunity to enhance your workflow, you must begin with strategizing on how you can implement the solution without heavily disrupting the original process.
It would take a serious amount of time to plan how you can improve the flow of inventory; it would also take a tremendous amount of effort to execute properly. That’s why in both areas, you must be consistent and coherent. To build a house, you need a blueprint — the same goes for inventory management. You need to have a clear understanding of what you want to achieve before you implement changes in the operations.
It’s important to remember that your decisions here will have a significant effect on not only the inventory flow but the productivity of the whole company! You have to make sure that you choose the right thing to do.
Optimizing how your merchandise reaches your customers is what inventory management in the Philippines focuses on. One way of continually improving and solidifying the processes involved in it is to start with the things that are considered in the decision-making process. As long as you keep in mind the mentioned concepts when you have to make decisions, you’ll be sure to have very effective inventory management!