July 31, 2023
Too many businesses still struggle with inventory. 34% of businesses have sold products that weren't in stock. Meanwhile, 43% of small businesses don't even bother tracking their inventory.
This has to stop! There are far too many high-quality inventory management options available to neglect this crucial aspect of running a business.
What's more, there are countless reasons managing inventory correctly is vital in 2023. Read on to learn more about them.
Inventory management involves everything a company needs to do for inventory control. This includes gaining, storing, using, moving, and selling inventory. Companies must have strict procedures in place to make sure none of these processes go awry.
If a company has good inventory management, it can avoid many issues. Some of these include:
These benefits are evergreen. If you want reasons that are uniquely important for the year 2023, look in the section below.
Different aspects of 2023 have made simple inventory management more important. As long as your business has a robust strategy, 2023 could be your best year yet. Here's why.
Prices have risen since the pandemic due to runaway inflation. Just last year, in June of 2022, the inflation rate was 9.06%. The inflation rate has lessened since then, but prices have remained high.
Now, more than ever, businesses need to start tightening their financial belts. Reducing product waste is a great place to start. But before they can do that, these businesses must improve their inventory management efforts.
Eco-consciousness is a hot topic right now. Many businesses are going green due to pressure from customers. Unfortunately, these businesses can't do that if they're constantly losing and wasting parts of their inventory.
Creating products and product elements takes natural resources. Those who understand environmental protection know we can't take too many resources. If we do, we'll destroy the Earth.
If your business starts keeping track of items, you won't need to waste resources by replacing them. You can even brag about how your lean inventory strategy has led to a better environment. Doing this can help you attract more customers.
Are you still using paper inventory tracking methods? Or maybe your company is still using old, less complex software like Excel. If you continue to do either of these things, your business will soon get left behind by its competitors.
Digital innovators have created many software and hardware solutions for inventory management in the past decade. Some of the solutions you have available to you include:
Each of these can give your business a unique advantage.
So, how can you improve your inventory management? There are plenty of strategies you can use. Here are some of them.
Even the best inventory tracking software can still be wrong. That's why humans need to double-check the data. They can do this by keeping track of in-stock products.
Do this as often as it seems practical. This may depend on employee availability. Automating inventory audits can help if you're short-staffed.
Some companies do yearly checks. Others perform their audits daily. You can also limit your audits to the most popular items.
Any amount of effort can lessen your inventory errors.
How well are your suppliers doing? Do they often deliver late or short of a product you need?
Track the errors your suppliers make. Note if these seem too frequent. If this happens, have discussions with your suppliers.
Are they unable to change their ways? If so, switch suppliers. Doing this can improve product quality, customer satisfaction, and more.
Don't just write down inventory data. You also need to analyze it and look for patterns. This way, you can prepare for demand spikes.
For example, say your business sells a certain water bottle. It's reasonable to believe these would sell more during the summer. However, you'd have to pay close attention to the data to find out when the bottle sales spike the most.
You don't even have to predict demand manually. Several types of software analyze the data for you. That way, your business can make predictions for future demand trends.
Creating a standard operating procedure (SOP) for inventory management is no easy feat. But with a little effort, you can reap countless rewards, including scalability.
Ideally, you need to create an SOP that all your employees can follow. This may involve cutting employees some slack when things don't go perfectly. Also, if you have several warehouses, you may need to adapt to several working environments.
In addition, you can't expect your SOP to remain perfect forever. You'll likely need to make several changes during its first year. Frequently analyze how your SOP performs and adjust it accordingly.
The changes you need to make should lessen as the SOP gets older. However, you can't expect an SOP to remain perfect forever. As the world changes, your SOP will likely need to change as well.
Now you can see why inventory management is crucial. You also have some great tips for managing your inventory. If you follow them, managing your inventory shouldn't be a struggle.
Still, you may need more help. If so, consider using our Britecheck inventory software. It's perfect for inventory for small businesses.
Sign up for Britecheck today!