Inventory planning plays a major role in any company and especially in the SME sector where the manpower is low and the amount of work is the same as compared to big companies. In conditions like this inventory management can not only play an important role.
The key thing to see in any business or manufacturing unit is how much material is in stock and how much is going out or returned back. If unable to manage this then business is bound to fail. Here the inventory management plays a pivotal role.
But before you start using any inventory management software you should keep few things in mind. How best the software can be utilised and whether you are able to find easily the information you are looking for. If any industry is using inventory software they should be well versed with the features. The good inventory management system should allow you to see inventory details in all levels . You should be able to figure out overall inventory status in a go.
Inventory management software comes with many features like
- Able to create purchase orders and email directly to vendors
- Can maintain a database of customers and suppliers
- Able to set low-level warnings so that you know when to order
- Customise purchase order
Raw material monitoring
- Software should monitor and update about stock levels.
- Should be able to manage inventory location wise.
- View inventory levels by location, category or overall
- Product history shows when items were received or sold
Inventory management software should have a facility to enter finished product details to manage production. This can suggest how much the companies need to produce as per the demand and what all raw material is required to be reorder. It should also contain full details of the product.
Bills Of Material(BOM)
BOM is the list of all the components & assemblies of a product. BOM contains the information about the final product along the spare part it has used.
Manage Users and Locations
- Able to record transfer stock between locations
- the software accessed via online it allows users in different locations to log in
- allows to define access levels to different users as per their role or job responsibility
- it also allow to manage multiple businesses simultaneously
Delivery Challan or Delivery Note,
The software should be able to generate delivery challenges. It is a very important document even for compliance wise Delivery Challan is a complete list of products that are being delivered by the vendor, that are ready to be delivered to the customer. Delivery Challan is signed by the receiver and is sent back again to the vendor along with the Purchase Bill. It should Track product delivery, this document is proof of delivery and how quantity of items delivered
The inventory management software streamlines your Inventory Process and can increase the productivity of the employees. If the process is set then you will see the increase in production as well.
Inventory management techniques and best practices for small business
Here are some of the techniques that many small businesses use to manage inventory:
#Fine-tune your forecasting. Accurate forecasting is crucial. Your projected sales calculations should be based on factors such as historical sales figures, market trends, predicted growth and the economy, promotions, marketing efforts, etc.
#Use a first-in, first-out (FIFO) approach. Products should be sold in the same sequential way as they were purchased. This is very important for perishable products like food, flowers, and makeup. For example, the owner of a bar has to be cognizant of the materials behind the bar and apply FIFO methods to improve their inventory. For nonperishable products, it’s also a better idea since items sitting around for too long might get damaged, or expire and unsellable. The best way to implement a first-in, first-out (FIFO) approach in a warehouse is to add new items from the back so the older products are at the front.
#Find low-turn stock. If you have stock that has not been sold at all in the last six months to one year, it’s probably time to stop adding more in stock that particular item. It is always better to acknowledge different strategies for getting rid of that stock — like a special discount or promotion — since excess stock wastes both your capital and space.
#Audit and verify your inventory. Even with high-quality inventory management software, periodically you still need to actually count your inventory to make sure what you have in inventory matches what you think you have. Different techniques are used by companies, including a year-end physical inventory that counts every single product and spot-checking, which can be used for products that are moving fast or have issues with stocking.
Read More – How to Avoid Inventory Planning Pitfalls
#Use high-quality cloud-based inventory management system software. Look for software with real-time sales analytics. SalesBabu Inventory Management Software connects directly to your point of sale, so your stock levels get adjusted automatically every time you make a sale. Review your daily stock so you get an idea which items are low or out of stock so you can order them in time.
#At all times track your stock levels. Have a robust inventory control system in place for tracking your stock levels, prioritizing the most costly goods. High-quality inventory software saves you valuable time and money by doing much of the heavy lifting for you.
#Always remember quality control. It’s always important to ensure that all your products look great and are working well, irrespective of your specialty. It can be done by a quick scanning by employees during an audit of the stock that involves a checklist for signs of damage and labeling of the correct product.
#Appoint a stock controller. Stock control helps to determine the quantity of inventory that you have at a given time and applies to all products from raw materials to finished goods. If you have an inventory lot, you may require a person who is responsible for handling it. With the help of a stock controller, you can process all purchase orders, receive deliveries, and make sure that everything coming in matches what was ordered.
Advantages of Inventory Management Software
- Cost Saving – Stock costs money till it sells. Carrying costs will include storage handling and transportation fees, insurance, and employee salaries. Inventory is also at risk of theft, loss from natural disasters, or desertion
- More Organized Warehouse – An well-organized warehouse with items organized based on demand, which items are frequently sold together and other factors will reduce labor costs and speed order fulfillment.
- Avoiding Stockouts and Excess Stocks – Better planning and management helps a business minimize the number of days if any, that an item is out of stock and avoid carrying too much inventory.
- Better Terms with Vendors and Suppliers – Inventory management will also provide insights about which products sell and in what volume. Use that knowledge as a grip to negotiate better prices and terms with suppliers.
- Better Inventory Accuracy – With the right inventory management, you know what is in stock and order only the amount of inventory that you need to meet demand.
- Reduced Risk of Overselling – Inventory management helps track what’s in stock and what is on backorder, so you don’t oversell products.
- Greater insights – With inventory tracking and stock control, you will be able to easily spot sales trends or track recalled products or expiry dates.
- Increased Profits – A better understanding of both availability and demand will lead to higher inventory turnover, which leads to greater profits.