Inventory Management System: Let’s go back to basics
The aim of this guide is to treat you as a layman and to assume you’re starting from square one. It doesn’t matter if you have the vaguest of systems for tracking inventory. It doesn’t matter if your stock has no part numbers or named locations. If you don’t know what these are, or if you don’t have an inventory management system at all, it doesn’t matter!
What we want to do here is provide you with a detailed, step by step guide to setting up a software-based system that gets the job done. If you follow our advice, you’ll look like you’ve been doing this for years.
You’re going to need efficient inventory management software for your business to run in a smooth, uninterrupted way. Bearing that in mind, let’s delve into the basics behind how to make an inventory system.
A pretty good Inventory Management System
Wait, “pretty good”? Don’t we mean “perfect”? Actually, we don’t. It’s best to be totally honest from the get go. There’s no perfect method of keeping an excellent inventory management system. Luckily there are numerous bad methods you can learn from. We’re going to guide you through the inventory maze, point out the pitfalls and show you how best to implement our recommendations.
Software is vital to this. It makes things easier and takes productivity levels through the roof. But no matter how watertight the ship, it will leak if you fail to follow basic steps. The first of these concern:
The elements of a pretty good Inventory Management System
Organized location names with easy-to-read labels: Name everything and label it. This is an essential first stage that is often overlooked. Imagine how much time is wasted when things are placed in the wrong place, and precious resources are expended hunting things down.
Remember, any space can be utilized for storage, from an open aisle to an empty corner. Using clear labeling saves you a mountain of hassle in this regard. Inventory is composed of lots of different parts that must work in conjunction with one another. Avoid referring to locations by more than one name; that way chaos lies. If an item can be stored somewhere, that ‘somewhere’ must have a name, and it should be labeled with that name.
Your life becomes a breeze when everything is detectable at a glance. Why make your eyes ache by squinting at small lettering? Let your labels shout from the aisles in bold type. Have you thought about arrows? They can prove invaluable if you have shelves above and below, helping you locate what you want faster.
Describe your items: Defining items with crystal clarity streamlines your operation. Speed fuels efficiency in business. You have to know exactly what you’re looking for. Otherwise, everyone gets confused about whether or not they have stock. Staff wonders what items need to be ordered. Having crisp, succinct descriptions in your inventory system constitute a major saving which pays off big-time.
Numbering your items: One of the great benefits of using software to track inventory is it makes you appreciate the true value of item numbers. Many a sprained wrist or a migraine has resulted from typing descriptions that are hundreds of characters long. Numbered items abbreviate those descriptions, meaning you only have to hit a few keys to find what you’re after. When it comes to making transactions, filling orders or filtering/searching reports, numbers are your item’s best friend.
Measuring units: Well-created and consistent units of measurement ensure your item quantities are clear and instantly identifiable. Terms such as “pcs,” “ea,” “lbs” and “bags” make your stock levels and shipping/ordering quantities far easier to understand.
Good starting count: Achieving an excellent stock level count is quite simply a no-brainer and one of the prime factors to consider when loading data into a new inventory software program. Get this right, and you’ll be faster, better organized and ready to tackle that detailed inventory day in, day out.
All inventory activity tracked: Paperless has been the way forward for years, which is a strong reason in itself for purchasing inventory software. Better for your business, better for the environment. Crucially, it also creates a priceless overview of your operation, allowing you to track items smoothly and keep accurate records, as well as allowing other users to access your stock. Such packages offer you greater insight into your regular activity, beating pen, paper and spreadsheets hands down.
The right policies: Though an inventory management system can’t function without numbers and stats, it wouldn’t work at all without people. They are naturally the most critical element in running a top-notch inventory. Drawing up clear, coherent policies that empower your workers rather than flummox them is essential. They have to know what to do with a range of items: those that are received, taken from stock, reserved for future use as well as those that are required for production. Once these instructions are nailed down, and in the consciousness of the business, everyone knows what their responsibility is.
Those you trust with your livelihood must have faith in your processes. Write down policies and, crucially, make sure they are followed. If you or the people you work with aren’t consistent about the way inventory is handled, it won’t matter what software you use. You will meet with frustration and failure on a regular basis.
For more help becoming a whiz with inventory, chat to our guru for advice.