Accurate inventory management is crucial for every business to maintain profitability and control costs, but it’s not always easy. Even small companies with limited inventory often struggle to keep their inventory under control.
The secret is having an organized system that reduces the potential for inaccuracies and other mistakes – and here’s how you can implement this in your business.
1. Automate inventory and ordering as much as possible
Machines are more accurate than human beings. When it comes to inventory and ordering, a computer can process inventory counts and place an order based on set pars lightning fast compared to a person, and it can do that with little to no errors. The only way there would be an error is if the original input was wrong.
Automated inventory is great, but it’s equally important to automate the ordering process. When someone uses technology to count inventory, if they have to go through a separate process to place an order, it’s wasted time.
The ideal setup is one in which the order is placed automatically as inventory is entered into the system. You might have someone on the back end eyeballing the orders briefly to make sure they look good before hitting that “approve” button, but you don’t want anyone to have to manually enter orders after taking inventory if you can help it. This might not work for some vendors, but if you can automate ordering, don’t hesitate.
2. Use RFID chips instead of barcodes
Barcodes seem like a convenient way to track inventory, but they’re actually a bit archaic compared to RFID technology. For example, a barcode scanner can only scan one item at a time and barcodes can’t be scanned from far away. Barcodes are finicky, and you’ve probably had trouble scanning a barcode at least once in your life, whether you were working in retail or trying to use the self-checkout system at the grocery store. They’re inconvenient compared to RFID chips.
An RFID scanner can read multiple tagged items at once instantly, which makes the inventory process much faster. If any tagged inventory is in the presence of an RFID scanner within range, it will be counted immediately. The best part is that implementing RFID technology into your business is easy, and there are a variety of RFID scanners with varied features to suit different needs. Whether you need something simple or a bit more nuanced, there is a scanner for you.
When you switch to RFID, you’ll see a major improvement in the following areas:
- Improved inventory audits
- Reduced stock discrepancies
- A more accurate stock replenishment
- Optimized stock levels for customers
- Happier customers
If this sounds like an improvement for your business, check out this article to learn more about how RFID technology works.
3. Create a system for expired products
If your business is in the food industry, you’re going to have expired products that need to be thrown away on the day they expire. When you don’t have a system to account for this type of waste, it will look like you’re just missing product. You need to know where your wasted product is going, and separating expired products will help.
The easiest way to do this is to have a standard form where workers document the expired product they’ve thrown away. The specifics of how this works will vary based on your business and what you’re throwing away, but in general, it’s best to keep this on one master form. You can also ask employees to place expired products in a special bin in the back for you to count if you don’t trust their judgment. You’d be surprised at how hard it is for some people to estimate when they are tossing out ¼ of a product.
4. Crack down on waste
Waste is a major source of lost inventory, especially when it comes to food and beverages. Since items have definite expiration dates and mistakes often need to be thrown out, the more you can reduce waste, the better. You can’t eliminate all waste, but you can train employees to be careful and thoughtful with supplies. For instance, losing just one sleeve of cups a week can add up to thousands of lost dollars each year.
Better inventory management equals higher profits
Getting a handle on inventory management will help you increase inventory accuracy, reduce stock outages, and save money. Automation is one of the best ways to accomplish these goals, so if you haven’t implemented any new technology, now is the time. Automation is proving to be the future of many industries, and it’s smart to get on board now so you don’t get left behind.