5 ideas to improve your inventory management

For companies, managing their stocks is not only a problem but also a challenge, as it’s essential to know when to add or remove items from the shelves. The entry and exit of their products may have great influence on the company’s profitability.

In addition to the need to ensure the correct quantity of stock, it’s necessary to analyze how to keep the product flow smooth. This means having a clear idea of what you plan to sell, understanding the demand for each one, evaluating the supply chain, and finally making decisions about which models are more profitable and which ones will be replaced by others.

Controlling your stock is knowing the sales potential of your products

The first step in managing your stock is analyzing your sales potential. To do so, you should take into account the following data:

Your market research – This includes analyzing the customers’ requirements, identifying the needs, trends, and behaviors in the sector you work in.

Sales forecasts – You must estimate your customers’ buying habits for the next three months to see if they require any new products.

Market competition – It’s important to compare the different offers available and choose the most competitive one.

The best selling models – This helps you determine whether you should create new versions of existing products or replace them with other models.

Inventories regularly and identify your products

Once you have analyzed your sales potential, it’s time to make sure that you have enough stock at hand. A good idea is to organize a control cycle every month, taking note of the changes in the quantities ordered and received. Having this information can help you to detect gaps in the supply chain and identify the products that require replacing.

To get more out of this process, you should always keep track of the sales potential of your products. If there’s no change in the number of units sold, you might want to think about introducing some new products or updating current ones.

Choose a replacement model is an efficient strategy

When choosing replacement models, it’s vital to consider the following aspects:

Efficiency – There’s no point in creating new models for the sake of it. When choosing between two alternatives, it’s preferable to go for the one that has a greater impact on the business’s profit margin.

Reachability – You should choose a product whose distribution channels are easier to access than those of the old model.

Cost – It’s better to choose a new model that costs less than the one being replaced.

Determine the maximum and minimum number for the goods in stock

Another key aspect of managing your stock is determining the maximum and minimum levels of stocks required to meet customers’ demands. When calculating these numbers, you should include the following factors:

The total amount of stock needed – Depending on the type of company, this can range from 10-50% of the annual turnover.

Customers’ purchasing patterns – For example, seasonal variations can have a significant impact on the demand for certain products.

The level of inventory already held – If you hold a large amount of stock, it’ll be difficult to reduce the amount of stock in order to increase the stock turnover.

Customer preferences – You should look at customer preferences and try to understand what they really need.

Count on a collaborative partner in times of crisis

One of the main challenges faced by companies that have to manage their stocks is the fact that they often don’t have the right tools to do so. However, if you combine the knowledge acquired through this article with the support of a professional logistics service provider, you’ll be able to manage your stocks effectively.

This way, you’ll know exactly what to do, when, and where to put all the stock. You’ll also be able to reduce the risks related to overstocking and understocking, thus avoiding overheads and unnecessary expenses.

 

In order to avoid such situations, it’s important to maintain a close relationship with a logistics company that provides the right solutions for your needs. With their help, you’ll be able to maximize the benefits of your stock management system.