4 Ways Inventory Management Can Help Your Small Business’s Long Term Strategy
For any small business looking to achieve success, one element of critical importance is inventory management. In order to function properly, small businesses and large companies alike must have an efficient system that allows them to manage the movement and storage of goods. In a previous article, we shared some reasons why inventory management is important, but in today’s article, we are going to focus on how inventory management can help your small business in the long-term.
It is rarely ever the goal of a small business to remain small. The objective is usually to grow. Strategies that you put in place today, can make that possible. In terms of inventory, when you have control of your small business’s inventory, you can better direct the growth plans and strategies for your business as a whole. Following are four specific areas of your small business that could see significant improvement, when your inventory management system is in order.
One of the worst situations small businesses often face is running out of stock. In some cases, not having items in stock can mean an inconvenience to your clients, but in other cases, it can mean a massive loss of sales altogether. Imagine going to a website to order a product only to find out that the product is out of stock. Chances are you won’t wait for the product to be in stock, especially with the ease and availability of online shopping these days. You’ll probably look elsewhere. Likewise, chances are that your customers won’t wait for you either.
In order to keep your small business from coming up empty-handed, it is important to create a replenishment system that outlines when levels of stock in-store and in warehouse require replenishment. If you establish a clear form of communication between your storage facility and your vendors, you can ensure that your products will remain on the shelves on a constant basis. To be a company that never has to use the term “sold out” would truly set a standard in your industry.
The Elimination of Wasteful Habits
When your inventory system is working well, it keeps your business not only from running out of stock, but also from all having too much stock. Excess inventory is one of the biggest wastes of money in businesses. In anticipation of a product selling well, small businesses often make or order large quantities. Sometimes that can pay off, but more often than not—especially in the fickle world of business—small businesses are left with a financial deficit and a ton of products that cannot be moved.
In a recent article, we outlined various ways to incorporate the lean management system into a small business platform. By implementing systems like the just-in-time method or the kanban scheduling system, your small business can save both time and money. These systems require that your business only creates product as there is an actual demand, instead of anticipating the demand. This is yet another way to ensure that when your clients order products, the products are there.
Meeting Delivery Timetables
If your small business supplies products or goods to other businesses, you are on their timetables. If your customers’ delivery timetables are not met, your relationship with vendors could be in jeopardy. The same could be said for individual clients. If you want to ensure customer satisfaction, don’t keep your customers waiting for their product.
Set reasonable goals for your delivery process, especially if some of your items are custom-made. Analyze each component that contributes to prompt delivery, from warehouse to storefront, and develop plans that help each team member know their role in the process. Determine what timeframe works best for both your customer and your staff to create a system that works for everyone. Being able to meet deadlines is an incredibly valuable element in any long-term strategy.
Reducing Time Wasters
Inventory management software is undeniably the best way to get your small business on the right track. In regards to all of the points mentioned above, using an automated system cuts down the amount of time your employees have to spend completing such tasks tremendously. For instance, when stock is received at the warehouse, once it’s scanned, it’s automatically logged. From there, the software can track current and predicted levels of stock, making it easier for your team members to know what needs to be ordered when. Essentially, inventory management software covers all four points. It is essential for any small business that wants to get ahead.
Managing inventory is all about eliminating costly surprises. Proper inventory management can actually increase a company’s profitability from 20 to 50 percent! Aside from the financial benefits, good inventory management will help your small business establish a reputation. There are many ways your small business can make a name for itself in your industry, but being a reliable business is an aspect of business operation that is directly related to inventory management. Set the kind of standards for your business today that will keep your customers coming back again and again tomorrow.
Tuxedo Impressions LLC™ can help you discover inventory trends within your small business, so you can plan for future success and avoid future losses. Contact us today to set up a consultation.
~ Jamara Wilson, Team Tuxedo Impressions LLC™