What operational aspects can inventory management help solve?
- Product tracking and status indication
- Statistical product forecast
- Inappropriate inventory management techniques
- Cash flow management
Before the inventory process of a company can become smooth and flawless, it has to go through a stage wherein a number of issues arise in their operations. No business is immune to these. If you’re new to the scene, even with the countless hours of research that you put in, chances are, you’ll still experience at least a few of these.
Inventory management in the Philippines, in general, is quite prone to problems and issues because of the same old problems. Improper inventory processes and management techniques lead to substandard performance and results. Even if you have the latest point of sales system in the Philippines, as long as you don’t see issues as issues, then you’ll still fail either way.
Once you understand the foundation of inventory management, you’ll find it easier to lessen or outright prevent these operational issues within your business!
Product Tracking and Status Indication
There’s no doubt that whatever products you make will go through a rigorous process from the very beginning of its life cycle. This process tends to be a lot more complex for some of the most popular and commercialized items out there.
As the overseer of inventory, it’s very important to make sure that the current state of the product is easily identifiable. From raw material collection and manufacturing to distribution and sales, you have to be diligent in tracking everything!
Without proper tracking, hiccups in the product cycle are sure to cause setbacks. For instance, a problem in the manufacturing process might result in products that are faulty which would be dangerous if it reaches consumers.
A great example would be the 2016 Samsung Galaxy Note fiasco which showed that bad battery design and a rush to release an updated version of the phone can lead to numerous incidents of the product overheating and catching fire.
The problem would never have happened if product testing and design were meticulously monitored before and during manufacturing.
Statistical Product Forecasts
Math can be quite complicated. Any job that requires it needs people who have the talent and skills to do it properly. When it comes to inventory management, a lot of aspects depends on proper computations, statistical formulas and precise analysis of data, particularly when making sales forecasts and calculating stock levels.
Since this is one of the first tasks done to ensure an efficient inventory management strategy, it has to be done with precision. The margin of error should be minuscule and every potential problem should be accounted for.
But of course, we are only humans. Chances are these forecasts are going to be inaccurate once or twice.
To reduce the risk of having failed a forecast, the best thing that you can do is to make use of inventory management software that focuses on forecasts and data analysis. This will reduce human error and will put most of the variables into the logical and unbiased analysis of a computer.
Inappropriate Inventory Management Techniques
People who have already tried and studied inventory management should know about a number of inventory management techniques. This abundance of information can be both an advantage and a risk, depending on how you make use of it.
You can’t just pick one of these techniques at random and implement it into your business. The amount of choices is there for a reason. Remember, some inventory management techniques are more suited for particular types of businesses.
For example, the FIFO (First-In-First-Out) technique is best used by restaurants and any business that deals with perishable or seasonal goods. This ensures that the earliest products are bought first, decreasing the chances of inventory spoiling or becoming obsolete.
By identifying the most appropriate technique for your business, you’ll optimize your inventory processes! That being said, even when you find one that is perfect for your processes, it’s important to remember that sticking to it to strictly can lead to stagnation. Use the technique as a basis and include your own improvements on it to further facilitate advancements and upgrades in your business!
Cash Flow Management
The way you handle your money is important for the longevity of your business. Whether its outstanding bills, pending payments, or basic sales money problems are major issues whenever they come up.
The best thing that you can do prevent any vagueness in cash flow management is to plan and budget as much as possible. There are even a wide variety of tools that are available to make it easier for you.
A good suggestion is to integrate your cash flow system with your inventory management software. In the Philippines, a point of sales systems is very popular in helping out with tracking inventory and the money flow that comes with it!
Operational issues are common and should be expected for budding businesses. It’s a good sign to behold because it means that you can do something to improve on the current state of your business! Be sure to study properly what inventory management in the Philippines is all about so that you’ll be able to expect and find solutions for the many possible operational issues you get!