7 fundamental steps to successful inventory control
“Success is neither magical nor mysterious. Success is the natural consequence of consistently applying the basic fundamentals.” Jim Rohn
Any successful business stands upon a solid, well-structured foundation. For inventory-based businesses this means ensuring that their inventory management system is well organised, efficient and effective – which means getting the basics right.
Whether you are a small, one person operated retail outlet or a multinational company servicing customers across the globe, if the systems driving your inventory management protocol are being poorly implemented, or worse, if the systems in place are themselves flawed and ineffective, then your business is being driven straight into trouble.
It is a maxim stressed across all disciplines – from sports and martial arts to business and finance – you need to master the basics if you hope to achieve success. Build a solid foundation and your inventory management system will not only be able to scale as your business grows, but it will be one of the major factors driving your business growth and success.
Success leaves clues Toby Robbins
Whilst the level of simplicity or sophistication of your inventory management system will differ considerably based upon the type and size of your business, a successful inventory management system – be it big or small – always leaves clues, or indicators, which are clearly apparent and apply across the board, whether it be a lemonade stand selling beverages on weekends or a global multi-brand distribution company selling worldwide.
Here are 7 fundamental steps your business needs to cover to ensure that its inventory management system will operate at optimal capacity.
1. Label storage locations clearly
Your staff needs to be able to locate stock quickly and easily. Clearly labeled storage locations with demarcated indicators like arrows or spot tags will help staff accurately pack, store and retrieve the correct items. This will keep the costly and time-consuming errors that arise from incorrectly identified stock to a minimum.
2. Make Inventory labels large, simple and easy to read
Avoid complex and vague terminology when labeling locations. Labels must be easily identifiable, readable and distinct. No two locations should be easily confused because of vaguely labeled location names. Keep it simple, keep it bold and keep it coherent.
3. Keep item numbers short and sequential
KISS – Keep It Short and Simple – is not just a clever acronym. It is a code that inventory managers adhere to religiously when it comes to using item numbers. Short, distinctive item numbers lie at the basis of all well-organised inventory systems – both online and offline.
4. Create product descriptions that stand out from the crowd
A good product description is one that allows a worker to instantly know exactly which item is being referred to. Clear and distinct item descriptions mean that your workers know exactly which item they are dealing with and confusing one item with another becomes an obsolete issue altogether.
5. Clearly define and state your units of measurement
Whether it be pcs, boxes, kg’s, cartons or ea. defining your inventory quantity accurately is very important. It enables fast, accurate calculations of your stock and makes for simpler, more proficient ordering
6. Start off with a rock solid start count
If you are implementing a new inventory system or simply upgrading your current one, it is vital to conduct a thorough starting stock count. The best time to conduct a stock count is AFTER completing steps 1 through 6 above. Attempting to do a stock count before this is akin to putting the cart before the horse.
7. Invest in a good inventory management software solution
From work at home mum stores to global distribution powerhouses, there are inventory management software solutions to cater to every business type, size and need. Investing in the right inventory software solution for your business will be the smartest decision you make as a business owner.
Nowadays, cloud-based inventory management software solutions afford businesses total control and instant access to their inventory – meaning less time pulling spanners out of the profit generating machinery of their business and more time proactively planning and growing their companies.
Whichever inventory management approach a business opts to go for – be it cloud based, integrated inventory management or the more traditional approach – the importance of building a solid foundation by sticking to the basic steps outlined above is essential.
For more information about setting up an inventory management system in your business, please contact us today.