Would you like to run your own operation to the best possible stock efficiency levels, so that you always have the optimal inventory without running into problems such as wastage, shrinkage and surplus?
Here are our top tips to help you manage your stock efficiently.
1) ABC rule
Start by tidying up your stock room and that any obsolete or redundant items, such as empty boxes, are removed. This will allow you to make the most of your space. If you haven’t already done so, invest in practical shelving units which can fit with your needs.
Preparing a list of the main categories of your stock will help you plan the layout and item locations which will allow you to tidy up your stock more efficiently. Clearly labelling the areas in your stock room will let your staff locate the items easily and quickly.
Remember to use to the ABC rule when categorising your inventory:
A: these are high-value items which make up only a small proportion of your stock (approximately 10%) and which generate the highest levels of sales value every year.
B: these are mid-range value items which sell well and which make up approximately 35% of your inventory
C: these are the low-value items which represent around 55% of your stock and which account for the lowest sales value annually
2) Storage strategy
When you are ready to arrange your items in your stock room, make sure you have plenty of labels ready so that every box and item can be individually identifiable. It is a good idea for each label to feature all the critical information, such as product name, quantity (if each box contains multiple items), expiry date. If you have seasonal items, this is also something you may wish to add to the label. It is also worth considering investing in a label printer. Ensure you carry out regular stock-taking exercises. Setting up a weekly routine will help ensure that you don’t forget to keep an eye on your stock.
3) FEFO works
Adopting the philosophy of First Expiry First Out (also known as FEFO) will ensure that the expiring-soon items in your stock are depleted as a priority. This is especially important if you have perishable items with a short shelf life. It is good practice to apply this principle to all your items, even if expiry dates are not an issues, as the boxes and packaging could get damaged the longer they remain in your stock.
4) Audit, Audit, Audit
Ensure you carry out regular stock-taking exercises. Setting up a weekly routine will help ensure that you don’t forget to keep an eye on your stock. Pay particular attention to any products which have expiry dates or which must be kept under particular storage conditions to ensure these items are still suitable for sale. It is good practice to set up minimum stock levels, as this will help you identify when you need to reorder.
5) Building Dream Teams
Establishing a good working relationship with you suppliers will facilitate the resolution of possible issues related to damaged deliveries or faulty goods. You can try and agree habitual dates for deliveries (ie end of the month, middle of the month) to help you manage your inventory to its full efficiency.
6) Know your stuff
Make sure you keep a full inventory of your products which you can then use in conjunction with your sales reports. This will help you understand stock movements and identify any patterns in demand. You can use this information to help devise your stock replenishment strategy.
Unwanted, damaged or faulty goods returned by your customers need to be managed extremely carefully as they could upset your perfectly created stock balance. Remember, stock surplus can be very costly! Returns should be sent back to your suppliers where possible or disposed of, to avoid storing items which ultimately you are unable to sell.
8) EOQ Model
If you prefer to use proven methods to manage your inventory, you can try the EOQ model. It is an economic model which allows you to predict your stock management requirements accurately. Keen to find out more? Check out this link https://www.investopedia.com/terms/e/economicorderquantity.asp
9) Invest in technology
You can consider investing in technology, such our StockAssist products, which are specially designed to take away the pressure of manually managing your stock levels. For example, our products can provide you information such as quantity by item, location (across multiple locations too!), expiry dates and tracking history… all at the touch of a button! StockAssist helps you reduce your stocktake efforts, resulting in reduced time and resource overheads.
Before investing in new technology, make sure you research all the options as some packages offer better value for money and first-class service.