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Three Inventory Control Strategies to Keep Retailers in Top Shape

 


In the past, inventory could be managed by chalking down the numbers in a notebook or a spreadsheet. But the way the modern-day retailers expanded their stores to a wide range of channels, started selling an innovative line-up of items, and provided many fulfillment choices, that system will unfortunately not cut it.

As the retail industry evolved with technology and time, adopting a sophisticated approach to the inventory management is not just a good idea - it has become inevitability. Although there is no one-size-fits-all solution, there are a couple that have proven quite successful, and that you can easily apply to a business for increasing the bottom line.

Define Inventory Management and Its Importance

The experts providing top-notch inventory tracking RFID systems defined inventory management as a way of keeping record of the business’s stocked products, and closely monitoring their location, amounts, weight, and dimensions. The key is to alleviate the price of holding the inventory by helping you know when exactly it is time to replenish the products, or purchase materials for manufacturing them.

Inventory management is the most essential things you need to do as a retailer since it ensures you have a substantial amount of stock on hand for meeting the customer demands. When not handled in a proper way, you may lose money on the potential sales that cannot be filled or/and waste money by stocking excessive inventory.

Inventory management is capable of saving warehousing costs.  Storage costs tend to rise when you have a lot of products to store or if you are stuck with a particular product that is quite tough to sell.

The Best Inventory Control Strategies

1.      Establish the Par Levels

The foremost thing you need to do is by establishing par levels of the products, which are the minimal amount of product you must have on hand under all circumstances.

You will know it is time to order when the stock dips below the pre-set level, and that level will vary by the product. The level relies on how fast a product sells, and how long it takes to be restocked.

When establishing the par levels, please carry out a thorough research. This will systemize the entire procedure and help you arrive at decisions within a short period.

2.      Use the ABC Analysis

The professionals offering RFID inventory management systems said the ABC analysis allows you to prioritize the products. Under A, keep all high value products with low sales frequency. They need maximum attention since they have the maximum financial impact. Under B, keep the middle value products that have mediocre sales frequency. Under C, keep the low value products with greatest sales frequency. These move out of the shelf more easily and quickly.

3.      Set Up a Contingency Plan

The retail sector is dotted with challenges, be it an unexpected sales spike or having the manufacturer run out of products when you have orders to meet. You can lessen the damages by detecting the possible risks and setting up a detailed contingency plan. Find out what issues may crop up and decide how you will react, what steps you will undertake, and how/if other parts of the business may be affected.

With an appropriate inventory management solution in place, you can do virtually everything, starting from decreasing the overall expenditures and forecasting future sales to getting you ready for the unanticipated and keeping the business profitable. There is not one optimal technique, but by trying the few stated above, you will be able to find out what actually suits your needs.

1 comment:

  1. I agree with a lot of the points you made in this article. If you are looking for the inventory tracking app, then visit AdvStock Inventories.I appreciate the work you have put into this and hope you continue writing on this subject.

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