How to Manage Inventory for Small Business
For a first gen businessman, effective inventory management tips for a small business are hard to come by. That is why we have compiled these 6 inventory management tips a small business can implement right away.
When your business is scaling up and inventory keeps moving in and out of warehouses on a rapid pace, things can get complicated. Investing in a high-end inventory management software is not a viable option either. These 6 steps will make you aware how to manage inventory for a small business effectively.
1. Go for vertical pallets in warehouse storage
Rethink your warehouse plan by going vertical. Vertical palettes help you store four times inventory within the same warehouse space. The only extra investment you will require will be heavy duty forklifts which again are available in affordable lease facilities. In the long-term, the cost benefit analysis works out to be positive than renting out extra warehouse space.
2. Place frequent sellers close to docks
A large majority of stock damages are caused when they are sifted from pallets to containers for delivery. This unnecessary internal damage can be reduced by placing frequently moved stock items close to the docking station. Amazon, the world’s most popular Internet retailer places most sold items in bulk quantities in easily accessible locations of the warehouse for quick spotting and picking up without causing damages.
3. Reduce inventory shrinkage with control measures
Inventory shrinkage is one of the deadliest villains every small business has to put up with. It is caused largely due to:
- Inadequate inventory placement for high value items
- Employee pilferage
- Inaccurate stock record updating
All these causes of inventory shrinkage are definitely avoidable with a handful of inventory management tips for small business. Inadequate inventory placement can be prevented by training employees to store high-value stocks in safe cases or in locations where shop theft is not possible. Employee pilferage can be controlled by making employees responsible for the inventory losses in their respective bays. Inaccuracies in stock records can be done away through regular employee training.
4. Stock automation to tackle inaccuracies
Stock automation will skyrocket the stock control efficiency of a business. There are several cloud-based inventory management software that do everything from recording receipts to controlling stock movements. Running out of stock will not longer be a concern, as these software can shoot reminder emails when the stock levels fall within the said threshold limit. A quick search for online inventory management tips will reveal how you can put your inventory management to good use.
5. Have a proper vendor policy
Estimates released by United States National Association of Convenience Stores report at least 20% of the inventory shrinkage to be caused by vendor mismanagement. Strict controls are to be put in place to ensure that every consignment sent by the vendor are indeed tallying up with the purchase requisitions and delivery reports. A vendor policy must be drawn stating the vendor’s responsibility to deliver inventory in complete adherence with the purchase orders.
6. Monitor and control internal pilferage
‘US retailers lose approximately $42 billion every year on account of internal pilferage and employee theft’ reports Global Retail Theft Barometer. The internal struggle is real and is causing severe stock control problems for retailers. So, an ideal way to bring internal pilferage under control will be through internal monitoring. Low cost camera surveillance, anti-theft alarms, security checks for leaving employees at exit points will help control internal pilferage.
There you go folks. These are the 6 best inventory management tips you can rely on if you are a small business owner.