What common trends in inventory management are prominent in the Philippines?
- Simple bookkeeping
- First-in, first-out policy
- Transition to inventory management
In the Philippines, large and small businesses alike rely heavily on efficient inventory systems that make distributing, storing, and restocking easy. Inventory management is a relatively common concept in the commercial industry because it’s essential for every business. In that regard, even with how common inventory management is, most businesses still feel the need to ask, what is inventory management in the Philippines?
At first, managing your inventory seems easy—you acquire your initial stock, wait until some of your stores get low, then order a new batch again, all the while keeping track of the number of products you have. But when you actually start managing inventory, you’ll realize that it’s more than just counting and ordering.
In the Philippines, most small businesses still do their inventory management manually. This means using pen and paper to literally write down the records on a spreadsheet of some sort. It’s still an acceptable way of doing the job, but with the technology today, there’s a lot of easier ways to do so.
In the context of Philippine commerce, inventory management is still in its traditional stages, so to give you a wider perspective, this article will show trends found in inventory management efforts in the Philippines.
One of the most essential parts of inventory management, bookkeeping is the primary database for your inventory. Everything is listed here, usually in an incredibly organized form. At the minimum, it would list down products, along with the total stocks, the price, and the current stocks on hand. Sometimes it’s paired with a ledger of sales and constantly paired to show the profit for the day.
The problem with simple bookkeeping, however, is that it typically means that’s all they do — list down sales and inventory. In most cases, there are no distinct protocols to follow whenever you need to make a purchase request; anyone can make a purchase request as soon as they see an item’s stock drop low!
Without proper bookkeeping and protocols for restocking inventory, businesses may find themselves with poor-quality items and slow-moving stock, eventually leading to an excess in inventory.
This is one of the primary reasons why the majority of small businesses in the Philippines fail at the start. The best solution for this is to study inventory management thoroughly and adjust accordingly, or use inventory management systems to make your life easier!
One of the better characteristics of Philippine inventory management efforts is the fact that most businesses implement the FIFO policy, which basically states that the oldest stocks should be the first ones sold. It’s one of the best ways to make sure that you won’t have any excess or obsolete inventory in the near future and it’s very effective in minimizing inventory costs!
The FIFO policy is a staple in any business that deals with food since it’s a perishable product. This is very evident in convenience stores, retail stores, and of course in restaurants all over the world even.
Exceptions to this first-in-first-out policy are some clothing stores that rely on the seasons for its sales. Outfits go in and out of style which usually means that their shelf life has a deadline. At the end of the day, the FIFO policy ensures two things—inventory will almost never become obsolete, and a sense of fairness when selling the products!
Transition to Inventory Management Systems
Many businesses and companies in the Philippines still have a hard time adjusting to change. Most of them still believe that the old ways of doing things are still the best. Technological advancements may be proposed and even created, but in the end, tradition is the one that is being followed.
Along with the more adventurous of the bigger companies, it’s the small and medium-sized business that stand at the top of using the more advanced systems to help propel their companies to new heights! They don’t have that much to lose anyway, so they are very open to solutions that they think will improve their processes—one of which is the introduction of inventory management systems!
Barcode scanners, automated ordering, and inventory tracking services, and automatically updating databases per purchase are just a few of the many functions that an integrated inventory management system provides to its operator. It may sound complicated at first—hearing a machine do all the work for you, but when you think of it, that’s already how the world works. Machines doing all the redundant stuff and people benefiting from it!
So, what’s inventory management like in the Philippines?
Well, the best answer to that question is that it’s in a state where it’s doing what it’s supposed to, but not to the extent in which it potentially can. Traditional methods of inventory management are still the norm, but it’s only a matter of time before inventory management systems become common knowledge and a staple in every business in the Philippines!