Enough Inventory – Or Too Much?

Your good reputation depends on meeting demand. Being profitable requires managing margins. Businesses and non-profits that depend on inventory, such as retail stores, restaurants, and food banks, need the right tools to manage those margins and stay profitable.

A retail business owner with inventory headaches was referred to me a while ago to get help managing her inventory. She was frustrated with tracking everything – too cumbersome and too little information. Her bank account told her that business was good, but she didn’t really know which items were driving those profits and which items were just taking up space. My task – find a cost-effective, easy-to-use solution to track inventory and provide information to manage turnover, margins, etc.

After considering her requirements, budget, and growth plans, I worked with my client to select and set up an automated inventory tracking system. That tracking tool made a huge difference! She got real-time visibility into sales, cost-of-goods sold, and re-order points.

Automation alone did not address all of my client’s needs. System instructions didn’t include all the steps “outside the box” for staying on top of inventory. What to do with system reports? When to re-order? Addressing four essential areas helped my client get the most from her new systems and focus on her most profitable sales:

1. Enough, but not too much

Figure out what is needed on-hand to meet customer demand without spending a lot on storage. Consider how quickly inventory turns over, “sell by” dates, and shipping time to set re-order points in your inventory system.

2. Easy to locate

Set up inventory for easy access to locate, track, and verify each item. Record where the items are located and have a good starting count. Standardize item names and units of measure to prevent duplication and other ordering errors.

3. Keep Up with Records

Record all additions, reductions, and other inventory changes accurately and timely so you always know what you have on-hand.

4. Verify

Spot-checking your inventory on-hand helps make sure your records are accurate. Verifying shipments reduces errors, such as paying for damaged or undelivered items.

Automated solutions are great for managing inventory and increasing profits. Addressing processes outside the box helps businesses and non-profits make the most of their system investment to save time, control costs, and meet customer demand.