Keep Your Stock in Check - 4 Things to Be Mindful of When Managing Your Stock
Winning a battle does not only depend of the bravery of the soldiers and attacking strategy, but on a very important factor which many tend to overlook.
That factor is, how well you move your supplies and reinforcements during the battle.
Running a business is nothing less than a battle.
The only difference being, here the logistics are not soldiers and weaponries but the product your business supplies to its customers.
As stocks sometimes consume a majority of a company's investment, it is essential that they be properly managed in order to help increase the profits of a business.
Here are four 'rules of thumb' that can be used in any business when it comes to inventory management.
That factor is, how well you move your supplies and reinforcements during the battle.
Running a business is nothing less than a battle.
The only difference being, here the logistics are not soldiers and weaponries but the product your business supplies to its customers.
As stocks sometimes consume a majority of a company's investment, it is essential that they be properly managed in order to help increase the profits of a business.
Here are four 'rules of thumb' that can be used in any business when it comes to inventory management.
- Quantity: Buying goods in the correct quantity and keeping a regular check on your current stock is essential.
The quantity of stock can be increased or decreased according to the market and customer demand.
Also ensure you have enough quantity of stock for items that are in high demand and minimal, yet adequate, quantity of perishable inventories; for example milk products which have a very small shelf life. - Storage: Make sure the place where you store your goods has got adequate capacity to hold your entire stock and also proper security measures in place in order to avoid theft.
Ensuring the use of cameras and alarms also reduces the chance of theft by internal staff.
Always make sure the storage space is used efficiently, as wastage of space can have direct impact on the holding or ordering costs of your business. - Managing the Inventory: Maintaining a regular check on your stock is very important.
This way you can keep tabs on old and obsolete stock.
By also keeping thorough stock records you can calculate your inventory turnover ratio and this in turn can help you set future targets for your business.
Start making use of the technology to manage your inventory, by computerizing your inventory management system.
This will make stock movements far easier to track and increase the forecasting accuracy of your budgets. - Managing the Funds: Continually negotiate prices with the suppliers and always keep more than one option open when it comes to buying goods in a large quantity.
Being loyal to only one supplier can prove to be a costly affair at times, especially if they refuse to offer discounts or choose to increase their prices with no prior warning.
Plan your purchase orders carefully and 'haggle' for suitable prices based on your market conditions and the number of suppliers vying for your business.