Inventory Control — How to accurately predict your inventory needs
For small and medium businesses, inventory control can be incredibly hard to get right. Too much inventory requires overflow storage space and, depending on the product, result in wastage. Too little inventory, and you could miss crucial sales and cap your own revenue.
Inventory Control plays a crucial role for all businesses. It ensures you have inventory and reduces warehouse costs. But having good inventory control is harder than you might think.
Inconsistent tracking, lack of data, bad communication or integration, poor storage systems and inappropriate software can all contribute to inventory-flow problems.
Here are some top ways small businesses can accurately predict inventory and manage inventory more proficiently.
The first element in improving your inventory control is to collect as much data as possible. Suppose you are using a spreadsheet and manually entering data and transferring information across sheets. In that case, data can easily get lost, repeated or deleted, meaning you don’t have a clear picture of how much inventory you might need, when and when it is sold.
A better option is to use software that automatically tracks your usage, updates and stores data. The more data you have regarding warehouse storage, current inventory usage, wastage levels, demand and returns, the better you can predict inventory requirements in the future.
Once you’ve collected data, you need to use it. Data is an asset. Analyze your data for patterns, unusual events, periodic trends, and growth forecasts. This way, you will be able to form conclusions and predict your inventory in the future based on existing data.
Of course, manually analyzing data can be expensive and time-consuming and comes with the added issue of human error. To accurately interpret data and identify patterns, you should look for a program that will automate the analysis. An algorithm will be able to make predictions based on existing data to meet trends.
Consider lead times
You will also need to consider the entire manufacturing and delivery process. If you need something in three weeks, but it takes five weeks to make, you’re already late. Consider the whole lifecycle of your product and factor this into your decision-making. There will likely be a gap between the time you order more inventory and when it arrives, which could leave you in trouble.
Minimize human error
If you are estimating your inventory needs, manually inputting and moving data and basing your decisions on how you feel and what you think, there will always be room for human error.
Minimizing human error means less waste, always having storage space and being able to focus on growing your business. You need to work with software that is easy to use, automates procedures and provides detailed analysis so when you make a decision, it’s based on facts and data, not what you think. The machine-learning element of StockTrim continually improves to meet your needs by allowing for seasonal adjustments, creating a forecast, recalculating its own predictions automatically and allowing for a buffer.
Optimal inventory control for every business
Investing in large inventory control programs designed for multi-national companies isn’t always an option as they are usually vastly expensive and are incredibly complex. Large suites of multiple software can be overwhelming, and for SMEs, it just isn’t worth the money.
That’s why we created StockTrim. Quickly and easily see where you stand, predict trends, and efficiently track orders. Gather data and make better, more informed decisions about your inventory control to save time and money.
Trial our software for 14 days, no credit card required.
This article was originally published at StockTrim.com.