According to the U.S. Small Business Administration, small businesses make up 99.7 percent of firms with paid employees. This statistic illustrates the importance that small businesses have to the growth and development of any economy.
In a similar fashion, depending on the sector where a business has its activity, small business inventory management can be a crucial part of its success. Many business owners seem to know this already since almost 80 percent of companies established in 2015 managed to survive until 2016, which is the highest value since 2006.
If you’ve been neglecting your small business inventory management until now, what better time to do a fresh start than the new year? These tips will set you on the track for success and hopefully help your company have a bright 2018.
1. Train Your Staff to Use Software Adequately
If your employees don’t know how to properly use your company’s inventory management software, this is obviously a source of inefficiency. Even worse, there is a higher chance of mistakes when placing orders and supplier requests, which can lead to unhappy customers and a lot of trouble for you.
Providing proper staff training is a great investment, not only in your inventory management software but in other areas you deem necessary. Well-trained employees will get your business running on wheels.
But since we’re talking about fresh starts, we also recommend you change your inventory management system to adopt a cloud-based solution. These systems are usually easier to learn, they provide remote access, which is good if you or your staff travel a lot, and they allow you to perform a lot of different actions, all in the same place.
A good example of a recent cloud-based inventory management system is DataQlick. Besides a centralized cloud database, it has tons of other features, like color coding for easier management and integration of multiple e-commerce platforms.
2. Implement an Efficient Storage System
The warehouse is the place where your inventory is actually stored, so it is at the heart of small business inventory management. And chances are that there is much you can improve as far as your warehouse organization and product placement are concerned.
Remember Pareto’s rule? When applied to businesses, it states that approximately 80 percent of sales come from only 20 percent of your stocks. So, one of the first and most simple things you should do is to place the products that sell the most near the shipping or packing areas. This change can have a huge impact on your efficiency, depending on the size of your warehouse.
Secondly, keep your products organized by areas. Never stop applying the right practices and store something in the first available shelf, as it can easily lead to a chaotic warehouse.
Also, communicate orders to the order picker digitally, using a mobile device. A modern inventory management system also helps here. This not only saves a lot of time but also reduces the human error factor.
You can find out additional measures by yourself by monitoring all the warehouse processes such as storing, counting, picking and packing. Find out where most time is being spent, why, and figure out ways to make the process more efficient.
3. Make Frequent Inventory Checks
Many businesses nowadays still close up shop for one or more days to audit their entire inventory. This can lead to huge losses, not only during those days but also because they can lose potential customers that find the business closed.
This method has an additional disadvantage. Since it is so time-consuming, companies only perform such audits once per year. So if any inventory issues are in fact uncovered, the source is very difficult to track, because you have a year’s worth of data to go through.
As a consequence, a new method is becoming more and more usual in companies throughout the globe, and that is to perform regular checks to small portions of your inventory. If you implement our tip to divide your warehouse into logical areas, it works even better.
This method works like a charm, not only because you won’t need to completely shut down operations, but also because it will be easier to identify the underlying cause of any issues you find.
Having a cloud-based inventory management system also helps here. Since most of the operations are done in real-time and directly introduced in the system, human errors are mitigated, thus reducing the required frequency for inventory audits.
