As you prepare for next season, right now is the perfect time of year to look at all the resources in your toolbox. You’re presumably analyzing all aspects of your business, and one tool that is imperative to your success is a solid inventory management system.
One basic, yet vital aspect of any inventory system is to track the quantity on hand, and having the right quantity on hand is paramount, especially at a time of year when you will likely have first-time customers walking through your doors. Just think of how unfortunate it would be to have a guest ready to purchase a specific product and you quickly realize that you’ve got none on the shelf, none in the back and you don’t have any in stock at your other location, either. You never want to turn a customer away because you don’t have sufficient stock on hand. If you have the right products in stock, and in the right quantity, you will keep customers coming back time after time.
So, as you plan for the upcoming busy season that will quickly be upon us, how do you know what to order? A key function of any software program is tracking of product sales. As the saying goes, “knowledge is power.” Analyzing your product sales during last year’s busy season will allow you to forecast which products to stock, from which supplier and most importantly, in what quantity.
How do you ensure that you are keeping ample quantities on hand for all the products you offer throughout the season?
And how do you ensure that you are keeping ample quantities on hand for all of the products you offer throughout the season? Establishing reorder points and quantities based on analysis of your prior sales will do just that! Your inventory management strategy should include having a system that will alert you once you’ve reached your reorder point, and readily display the quantity that you should reorder once you’re ready to create a purchase order.
Once you know how to prevent stock shortages, it is equally important to minimize overages – as they can be costly. When you overstock your items, they take up valuable real estate in your storage space, and if they don’t move off the shelves, you risk having to discount them substantially or even worse, write the quantity off altogether.
As accurate inventory tracking is crucial, you may consider evaluating your current procedures in addition to your software controls. It is a best practice to do physical inventory counts on a regular basis. Having the ability to produce a physical stock count form via your software system that includes product numbers and names along with a space to insert the “quantity held” will be helpful in identifying any variances. If you enlist the help of your staff in conducting stock counts, you can compare the quantity held number they’ve recorded for each product type to that of your master inventory report to analyze potential shrinkage. You can do a physical inventory adjustment to follow to ensure that the correct quantity is being displayed at the point of sale.
Now is the opportune time! Take a hard look at your current resources and procedures, and refine your strategy to assure increased efficiencies as they relate to inventory management for the upcoming season. Your sales could depend on it!
