Managing inventory effectively is one of the major challenges that many entrepreneurs are facing today. In an enlightening article published in Entrepreneur a while ago but still valuable today, logistics expert Paul Huppertz drew on his experience as a supply chain consultant for The Progress Group and offered entrepreneurs valuable advice on how to avoid some of the big pitfalls of small business inventory management. Here are the key lessons he had to teach.
Make Stock Projections to Prevent Overstock
While understock can be a major problem for businesses, leading to unfulfilled orders and customer dissatisfaction, having too much inventory can be just as unpleasant. Overstock increases storage costs and leads to other costs and expenses as well, as shelved stock invariably depreciates or gets damaged in time.
When it comes to small business inventory management, avoid overstock by restocking based on sales data for the previous month, buying as many items as you’ve sold, while taking into account seasonal increases in demand, such as during the holidays.
Use Bar Code Scanners and Cycle Counting to Accurately Track Inventory
Accurately tracking inventory during all the stages of order management and fulfillment becomes a lot easier if you use technology to eliminate miscounts and data entry mistakes. An effective approach is to implement a cycle counting system that relies on barcode scanners that integrate with your inventory management app. Learn more about cycle counting here.Â Â Â
Identify Your Key Inventory Items and Focus on Them
Acting on the general rule that 80% of demand will be generated by 20% of your items, identify the items that sell best and ensure that they are constantly replenished. Your forecasting should also be focused on these important items.
Â Backup Your Inventory Data
Lost inventory data can be a major setback for your inventory management team. The only way to deal with it is to frequently back up your data files, preferably in cloud-based storage solutions such as Dropbox or Google Drive, which protect your data from hardware failure.
Use a Professional Inventory Management App Rather Than Spreadsheets
Spreadsheets are time-consuming and vulnerable to data loss or even deletion. What’s more, spreadsheets don’t allow for easy collaboration between multiple people working on the same inventory management tasks.
The modern alternative to the spreadsheet is an online inventory management system such as DataQlick, which seamlessly integrates with QuickBooks online, drawing on your accounting data to provide you with a comprehensive yet intuitive inventory management and tracking solution. Learn more about DataQlick and its features.