An efficient inventory management can help you increase the efficiency of overall supply chain management of your company. However, as we are moving ahead, we come across more challenges and hurdles in managing our inventories. We have gathered a few techniques to help you manage your inventory while saving some money.
Start setting par levels for every product available
When you start setting par levels for each product available in your warehouse, then you are always ascertain about the right time to place a next order. What are par levels? Par levels for each product basically refer the minimum threshold of each products’ quantity to be kept in hands at all times and by all means.
Ideally, setting par levels help you determine the reorder time, safety stock and foreseeable sales of every product. Moreover, it will also help you make quicker decisions about products’ assortment; a number of times, par levels let you understand if a variety of a particular product is needed or not so you can order accordingly. In addition to this, a simple system is developed where in your absence, your staff can easily take over the mechanism.
Yes, we are talking about First In, First Out (FIFO) method in which you are supposed to sell the oldest stock before you start making money of the latest one. This is an easy to carry technique that helps you reducing spoilages created in your inventory. One of the initial costs of installing FIFO system is you need well-maintained warehouse to store your inventory.
Prioritize your stock using ABC
Your inventory has three types of inventory stocks:
A: high-value product but minimal sales turnover
B: medium-value product and moderate sales turnover
C: low-value product but high sales turnover
Make sure to pay attention on Category A more than Category C due to more impact of its sales on the financial books. Whereas, you can take a moderate hour of relaxation while handling Category B.