Inventory control is the supervision of distribution, storage, supply, and recording of stock or raw materials. It is necessary to ensure the business maintains the required quantities to meet the current customer needs without loss or excessive supply. The process is quite important for wholesalers, manufacturers, and retailers.
A great part of inventory optimization comes down to the accuracy of demand forecasting. Therefore, you should not make any mistakes. There are different variables that are involved, and you cannot exactly determine who is coming – but you can get close. These are some of the things you ought to consider when projecting future sales.
- Overall economy
- Planned marketing spend
- Guaranteed sales from subscriptions and contracts
- Market trends
Prioritize with ABC
The truth is that there are certain products that require more attention as compared to others. You can use ABC analysis to let you prioritize your inventory and separate out products that need more attention from those that do not. You can do this by going through the product list and organizing them from most important to the least important.
You should note that routine reconciliation is quite important. Usually, you will rely on reports from the warehouse and software to determine the product you have in stock. However, there is a need to ensure that the facts do match up. There are different methods you can use to do this.
The truth is that many issues do arise up when it comes to inventory management. In fact, these types of problems can fail the unprepared business. Maybe your warehouse does not have adequate room to accommodate the seasonal spike in sales. Putting a lot of slow-moving products in the warehouse can take a lot of space.
An effective inventory optimization adapts quickly to changes in the market. There is a need to have a good relationship with your sellers. Maybe you want to restock a fast-selling product, expand your storage space, or troubleshoot product issues; you will need the input of the suppliers and manufacturers. When you have a strong relationship with them, they can help you solve the problems you have.
A great relationship is not just about being friendly. Rather, it is about proactive communication. You should let the supplier know when expecting an increase in sales and adjust production accordingly.