A large part of what makes a company successful is their inventory management. In the Philippines, both big and small companies are slowly taking inventory management more seriously. When your products flow from storage to store shelves and ultimately to the hands of your customers smoothly, other business processes are made easier.
When you don’t keep track of your inventory, chances are you might get overwhelmed when the smallest of issues arise. Proper inventory procedures take these into account and develop or use existing techniques to bypass or at the minimum, control it.
Business owners that don’t understand inventory management completely can face a lot of issues that can lead to lower profitability and efficiency. By creating a personalized inventory management system that’s developed solely for your business, you’re basically optimizing the entire process of manufacturing, distributing, and selling your products!
Here’s a detailed guide to creating the most appropriate inventory management process for your business!
Just like how you would research on your target market before you start your business, you also have to do research about the needs of your customers. It’s important to understand what your customers need in order for you to accurately forecast the demand for your products.
This should be the first step in your inventory management process. Data gathering is incredibly important in making sure that your efforts will come into fruition quicker than expected. Remember to take note of your past sales, inventory records, and seasonal selling patterns. Use all that you learn to create a forecast for your future demand. When you’ve taken note of this information correctly, you’ll benefit from a reliable prediction of supply and demand!
For relatively new businesses that lack data on past sales, your focus should be on market research and revenue predictions; make do with what you have. By doing so, you’ll make sure that you have the optimal amount of inventory on hand at any given time while also avoiding issues such as running out of stock and unforeseen carrying costs.
Every process is smoother if you know what’s what. The more organized your inventory is, the easier it is to execute strategies and procedures for the entire process. You don’t need to be particular with the organization of your inventory. Something as simple as using labels to help categorize inventory depending on their demand or lifespan can already help immensely.
The most basic way to organize your inventory is to categorize them into three classifications. First are the highest sell-through items or those with high demands from your market. Second are the items that sell at a moderate pace. The remaining items, those who are slow to be sold is the third classification.
Anyone who specializes in inventory management in the Philippines should know the importance of the right inventory management technique. Choose wisely from the ones that are already known such as the just-in-time technique that can reduce carrying costs or safety stocks which adds a safety net for demand security.
In the Philippines, a point of sales systems is probably one of the most important systems for retail businesses. But when paired with a great inventory management technique, it can be used to further optimize the process of managing your inventory.
Make sure that you know the exact number and the cost of all the items you have in your warehouse and how inventory is moving in and out of storage. Oftentimes undermined, keeping track of inventory and is absolutely important in making sure that your entire business process is as efficient as possible.
Smaller businesses can do this by simply using spreadsheets as a means to track and record everything, albeit with a few manual steps involved. To make this easier, there are a lot of software options available online. These records will be used to help develop business forecasts, inventory tracking, and report generation.
Using inventory management software is one of the best things that you can do to optimize your inventory management process. But don’t rely on it too much, especially when it comes to inventory count accuracy. Make sure you do thorough recounts manually to ensure a much better data collection. One of the most common methods to do so is through cycle counting. This involves specifying a certain set of inventories to physically count each day and comparing those numbers with the data in your inventory management system. In doing so, you can easily identify potential problems and inaccuracies without having to do the overwhelming job of conducting a complete physical count.
By creating an inventory process of your own, you open your business up to more opportunities for growth and sales. You’ll also be able to save a lot when it comes to the operational costs of taking up inventory. Incorporate your own inventory management process and reap the benefits that it provides to every business!