01Mar

Shireburn Inventory Management SystemInventory management is the process through which you oversee the flow of products in and out of your organisation. Whether you’re in retail, distribution, wholesale or catering, inventory management is the backbone to your business, and if not managed properly, it can all too soon come crumbling down.

We’ve worked with countless local business owners and with more than 30 years’ experience, we’ve put together some basic inventory do’s and don’ts that can hopefully save you a lot of strife!

Do’s

  1. Do establish lead times for each product to understand how long it takes to replenish your inventory once an order is placed.
  2. Do monitor inventory levels. Having high levels of inventory adds to expenses and increases overhead costs. Limit seasonal inventory and cut back on inventory that does not sell as fast.
  3. Do identify your best sellers, ensure stock is always available and determine a desirable reorder point. You never want these items to be out of stock! Focus on the items that matter most and keep in mind that generally 80% of demand will be generated by 20% of your items.
  4. Do base your decisions on information, past trends and projections.
  5. Do consider seasonality and month-end spikes.
  6. Do set clear internal policies for adjustments and returns amongst other functions.
  7. Do track your inventory in various locations from warehouse or stores to outlet. Use electronic data interchange (EDI) and bar code scanning to help with stock takes.
  8. Do track work in progress materials. Track units as they move through different operational stages. Many businesses utilise some inventory to create other products so it is important for them to establish a system to track “work-in-progress” materials allowing them to adjust order amounts before inventory gets too low and slows production.
  9. Do look into inventory management software that can help organise your business and make your life so much simpler. Make a list of your business requirements (E.g.: Reporting, redemption of gift vouchers, returns) and ensure that the system works for you. Support for tracking batches, serial numbers and expiry dates are all functions that are critical for certain sectors such as Food and Pharmaceuticals, so you definitely want to ensure your software solution will support these too.
  10. Do invest in theft control. Without a good inventory system, it’s impossible to know if you’re being subject to theft by customers or employees until it’s too late.

Don’ts

  1. Don’t guess. You’re jeopardising customer satisfaction by guessing when you may next have an item in stock, or if it is available at another store.
  2. Don’t just give the job to anyone. Hire the right people to manage your inventory – it may cost you if you don’t. You’ll have thousands of euros tied up in stock and you should hire professionals with experience to do the job. Ensure that your software vendor conducts training for your employees in order for you to get the most out of your inventory solution.
  3. Don’t over stock for fear of being caught short. Base your decisions on information and reports on past trends as well as some decent projections. Storage is expensive and products that sit on shelves are subject to damage, depreciation and obsolescence, and you may end up having to reduce its selling price to sell it.
  4. Don’t depend on spreadsheets. You’re asking for trouble if you do. Spreadsheets can be very easily accidentally deleted, and files can be subject to data loss or corruption especially as the volume of data increases. It’s also not the most ideal platform for multiple users to be working on the same document at the same time. Be smarter with your inventory.
  5. Don’t slack on your back up plan. You’ve got all your inventory consolidated into a fancy software system, but what happens if there’s a fire or theft at your office? Your back up plan can range from saving critical data to a removable USB drive (which you take with you out of the office), to storing back ups in the cloud or on an additional offsite server.

At Shireburn we have over 30 years of experience in business software solutions, specialising in multi-channel solutions for retail, catering, distributors and more. You can count on Shireburn to guide you through a number of inventory management options to suit your particular business requirements. Get in touch with us for a proposal and demonstration.