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It’s estimated that around 43% of all small to mid-sized businesses lack barcode tracking, a known way to improve inventory accuracy. If you are still using paper-based counts, spreadsheets, or worse still, aren’t tracking your inventory at all, then these inventory management tips and best practices will make a big improvement in your company.
An inventory tracker is an automated system of tracking items entering the warehouse from receiving, tracking their location and quantity while they are in the warehouse itself, and then tracking them as they leave inventory to fulfill customer orders.
Even though companies are manufacturing and moving goods at a faster rate, they still tend to hold onto too much and overstock their inventory (Source: Supply Chain News). As the number of days outstanding grows, the value of the inventory decreases. Your company ends up spending more money to maintain warehouse facilities and personnel to maintain an overabundance of goods that shrinks in value. Is there a way to improve inventory accuracy?
The answer lies in the software used throughout your company for inventory management, as well as the attention given to inventory management best practices. With a software upgrade and an adjustment in your warehouse management practices, you can improve your skills managing inventory and improve productivity and profitability.
Adding an Inventory Tracker
Inventory trackers such as Sage Inventory Advisor can help you keep tighter tabs on your inventory. Business intelligence software can also incorporate data from other inventory management tools such as barcode scanners and Sage Inventory Advisor and incorporate them into your system’s reporting capabilities.
Best Practices: Tighten Inventory Controls for Better Efficiency and Profitability
Ready for some best practices? Try one or all of the following to improve efficiency and profitability in your warehouse and distribution center.
- Improve sales forecasting: Sales projections derived from your Sage Intelligence or Sage 300 ERP system can be used to develop a more accurate forecasting system. With better forecasts, you can fine-tune your manufacturing so you create enough outputs to satisfy customer demand without overstocking your warehouse.
- Prioritize production: Prioritize manufacturing production around what you know has sold or is most likely to sell within a short period of time. Use just-in-time delivery and lean manufacturing processes to improve systems.
- Use an inventory tracker. Inventory tracker systems can convert any handheld device such as a smartphone or tablet into a barcode scanner. The industry has moved beyond dedicated devices for inventory management. New inventory trackers are easier to use and portable. Many integrate into Sage products, too.
- Phase out your spreadsheets: Spreadsheets require manual data entry, do not synchronize easily with other systems, and require a lot of time to manipulate and use. Newer, automated systems can make inventory tracking so much easier and efficient. ERP systems such as Sage 300cloud (formerly known as Sage 300) and Sage EM (formerly known as Sage X3) offer a robust software package for accounting, financial planning, operations, and inventory management.
- Prevent spoilage: If you manage items that can spoil, such as ingredients, food products, chemicals, pharmaceutical inventory, or other items with a dated shelf life, be sure to use FIFO (first in, first out) inventory methods. Keep careful track of the expiration dates on your items to avoid spoilage.
- Enact contingency planning: While your goal is to keep inventory levels at the right levels, there are going to be times when demand outstrips supply. Plan for emergencies. Line up extra suppliers now and budget for rush shipping charges, if necessary, to accommodate customer
- Audit your inventory: Audit your inventory and reconcile records to actual inventory quarterly. The more frequently you audit your inventory, the better you will get at managing it for maximum efficiency.
Excess inventory can be avoided with a good inventory tracker, solid best practices in place, and an ERP system facilitating communications. With Sage 300cloud (formerly known as Sage 300) or Sage EM (formerly known as Sage X3), you have more information and better control over your business data than ever before. Add an inventory tracker, and you’ll improve profitability by reducing excess inventory. It’s a winning strategy for smart business planning.
IWI Consulting Group
IWI Consulting Group helps businesses gain insights into their operations, inventory, and profitability. We provide software and support for a wide range of industries throughout Canada. For more information, please visit IWI Consulting Group or contact us today.