Business success is heavily dependent on knowledge. That is, the more we know, the more we can do and the fewer bad mistakes we make. Key to this is proper management on all levels. This means managing not only staff, but also products and projects. But management can only get so far if we don’t put other systems in place to aid it.
One key area businesses overlook is how they take on their inventory management. It’s so often glossed over, most of us only realise the importance when it’s too late.
What is inventory management?
Businesses often overlook a key component to their own existence. Defining inventory management helps to outline precisely why this area should be of concern. Barcodes Inc. defines it as:
“the process of efficiently overseeing the constant flow of units into and out of an existing inventory. This process usually involves controlling the transfer in of units in order to prevent the inventory from becoming too high, or dwindling to levels that could put the operation of the company into jeopardy.”
You can see the importance: if you don’t have an idea about whether you have too much or too little of a product, this can lead to trouble. In order to properly respond to this, businesses must take an active approach to finding efficient management solutions.
Two common inventory management mistakes and how to avoid them
Ideally, your business will have some kind of inventory management software, to help mitigate the burdens of data gathering. Machines and software are more efficient than we are these days. But they only get us so far.
First, businesses can’t leave this for the last minute. Many don’t make plans for slow inventory turnover, for example. You need to plan by examining cycles and understanding the landscape. As Small Business Chronicle notes: “If you don’t take sales cycles into account, then you could be stuck with product on your shelves for longer than you expected.”
This can jeopardise your business, since it means you’re using up space with an item no one wants. It also means your investment in that product isn’t being paid back. Inventory management is part of trying to eliminate these kinds of scenarios from occurring.
Second, don’t rely on more space as a solution to more products. The only people that benefit from you hoarding unsold product are shelvers and storage space renters. Instead, consider donating or reducing the price for staff.