Inventory management is an important step in an organization to oversee in and out flow of products and services. A company can use a single inventory monitoring technique or combine various techniques to fulfill organizational needs. Businesses use enterprise network monitoring to purchase orders, create invoices, control inventory-related accounting, and generate receipts.
If properly labeled and quantified, the inventory-related control system can be automated to account for anything from food to clothing. Initially, barcodes were used for grocery checkouts, but now they can serve as a strategy for inventory monitoring.
So, companies can keep track of barcodes to ensure easy inventory management. Read more below to learn about several strategies to monitor inventory effectively.
1. Stock audit
Even when you have the best inventory management software, it is essential to periodically count your stock to ensure you have exactly what you think you have in stock.
Different organizations use different techniques to monitor their inventory, from year-end physical counting of every item and annual to ongoing spot-checking. It is very effective, especially for products with stocking issues or moving fast.
2. Using cloud-based inventory monitoring software
Always go for real-time sales analytics software. Inventory management software will directly connect to your sale point to check the stock level and ensure they are automatically adjusted after every sale.
The software will alert you through email to help you know which items are out of stock or low so you can restock or order more.
3. Hiring a stock controller
Stock control is vital to identify the amount of inventory available at a given time (applies to finished goods and raw materials).
However, you might need a person to be responsible for the inventory if you have a lot of it. The main work of a stock controller is to receive deliveries, process purchase orders, and ensure everything delivered matches the order.
4. Utilize drop shipping
If your organization utilizes the drop-shipping technique, you will be selling items without literally holding the inventory. Instead, the manufacturer or wholesaler is responsible for shipping the product and holding the inventory when the customer purchases from you. That way, you won’t be worried about storage, inventory holding, or fulfilment.
Drop-shipping is a technique that most online store owners utilize to make effortless and stress-free sales. This strategy is flexible enough to be used in all kinds of businesses across all industries.
5. Use the “first in, first out” technique
This approach dictates that goods need to be sold in a similar chronological order as they were created or purchased. The technique works better when dealing with perishable goods like flowers, food, and makeup.
For example, a bar owner needs to know what is behind the counter and use the “first in, first out” approach to improving bar inventory.
It can work for non-perishable items since they can become damaged if they stay for long in the store. FIFO is best applied in warehouses or storerooms to stock from the back to ensure older items are at the front.