What Is a Simple Inventory?
The main purpose of an inventory is to help businesses meet customers demand by keeping track of the finished goods to immediately fill such demands; it also helps maintain a good number of goods to ensure shortages can be avoided; it also allows the separation the materials needed for each different processes, and lastly, it helps businesses get access and take advantage of bulk discounts offered by suppliers. Simply put, inventory is a term used to define the raw materials or finished goods that a business has on hand. On the other hand, an inventory can also be a document that is used to list all their goods, items, products, equipment, etc.
How to Manage a Simple Inventory
Creating an inventory system that works for you and your business is one thing, but maintaining and managing it is another. So, here are some easy techniques that you can use to easily manage your sample inventory:
1. Improve Your Forecasting
Remember that accurate forecasting is vital in making sure you don't encounter any shortages. Hence, it is essential that you finetune and continuously improve your forecasting process. Make sure that your projected sales calculations are based on historical sales figures, market trends, predicted growth and the economy, promotions, marketing efforts, etc.
2. Use First In, First Out (FIFO) Approach
Business professionals suggest that you discharge goods the same chronological order they were ordered, arrived, or created. This means that you display items that have were created first so that they can be disposed of first. This is most appropriate to perishable goods, but can also be used for non-perishable goods to avoid wear and tear of the products. Pro tips: You can add newer items on the back of the stockroom so that older items are at the front.
3. Determine Low-Turn Stock/s
One good inventory management technique to use is determining stocks that have a low-turn rate. Products, goods, etc. that have been in your stockroom for more than six to 12 months should be without being sold should not be restocked. But you can also offer special promos and discounts to get rid of such products.
4. Audit Your Stocks
Despite having good inventory management software, there is still a need to conduct periodical audits to make sure your actual stocks match what you think you have. Although there are different periods you can conduct your audit, it is necessary to set a specific time where you spend enough time going through what's inside your stockroom. Some businesses conduct an annual, year-end physical inventory where they count every single item and ongoing spot-checking.
5. Hire a Stock Controller
If you have a lot of stock or items inside your stockroom at the same time, it is best to hire a stock controller to make sure your stocks are enough to supply the demands of your customers. Your stock controller will process all the purchase orders, receive the deliveries, and ensure that deliveries coming in matches what was ordered.