Managing your inventory, keeping track of your stock accurately is imperative in retail. It helps prevent many issues like out-of-stock problems, theft, and vendor fraud. It helps with assortment planning.
The Issues Created by Poor Inventory Management
When you do not implement a good inventory tracking and management practice, you are like to experience high shrinkage. As you do not keep track of stock, shoplifting, employee theft, inaccurate stock count in vendor invoices may all go unnoticed. It will lead to stock tracking errors and poor assortment planning.
Implementing an Inventory Management System
If you have a proper method in place to track and manage inventory from the time you receive it from suppliers to the time you sell the products to customers, you will be able to keep accurate track of everything.
- Assign Logical IDs for Each Item: Instead of using UPCs or other generic IDs, design your SKU formats to show some information about the item at a glance – like size, color, packing, gender, etc.
- Record Items Received in Detail: Train your employees to be meticulous in recording details of items received from suppliers. Vendor fraud accounts for 5.4% of retail shrink. Wrong stock counts in vendor invoices may not even be intentional, just misales. Nevertheless, if you keep track of every detail, errors can be quickly spotted and rectified.
- Keep Track of Stock Adjustments: Keep track of each and every stock movement. If an item has been taken off the shelf, record why it was done, whether the item is a total loss, or whether it is good enough to be disposed of in a sale, etc.
- Implement Methodical Stock Counting: You need to take manual stock counts in your store periodically to prevent thefts and errors. Divide your stocks into three categories based on how fast they sell. Take weekly count of your fast-sellers, monthly count of the next category, and may be a quarterly count of the slow-movers.
- Use Good POS Software: There are now numerous full-fledged POS Systems available that enable accurate recording and tracking of all sales made in your store. They are also able to update your inventory in real-time so that you are always on top of your stock availability status for all items.
- Use Good Inventory Management Solutions: A powerful inventory management solution can help mitigate a huge percentage of retail shrink and other stock-related issues. Using barcode scanners and other small equipment with POS systems can help eliminate errors and increase accuracy. Many good POS systems also come with full inventory management software. With these software now available on the cloud, there is really no excuse for not implementing a good inventory management solution even for small retailers.
Infographic created by WSI
The Benefits of Using Good Inventory Management Software
Using good Inventory Management Software can provide many advantages:
Keep track of stock accurately: With automatic updates and synchronization of data, you are always aware of stock levels for each item.
Avoid Running Out of Stock: Whenever a popular item reaches a certain stock level, you can send an alert to the concerned person to reorder that item or get a supply of it from your warehouse before customers are put off by a no-stock issue.
Analyze Stock Movement to Optimize Assortments: With clear and up-to-date records of inventory, you can find which items sell fast and which are slow-moving. This can help you make an informed decision on assortment planning.
Good inventory management methods and the use of Inventory management software can help increase the productivity and profitability of your business.
Video – What is a barcode?