Understanding inventory management in my company
Posted: Mon Dec 09, 2024 4:58 am
How do I know if I need to manage my inventory?
Problems measuring the input and output of products in your company? Product obsolescence? Difficulty viewing stored products? Too much stock?
Are your products spoiling/depreciating and you can't control it? Is your investment in products too high and you don't see any return? If the answer to all these questions was yes, you need to pay special attention to the management of what is stored and to your production processes! Inventory management is one of the practices to reduce costs in companies.
Many companies ignore inventory home owner database management simply because they are unaware of the basic principles of good management. Failure to pay attention to inventory management is a very serious mistake that can compromise the structure of the business. After all, inventory control is one of the pillars that ensures business efficiency and reduces costs and losses.
To better understand the importance of inventory management we first need to understand:
What is Inventory Management?
The idea is basically to monitor stored products to ensure that demands are met without excess and losses, in other words, to manage your company's material resources.
This inventory management control is essential for the company to check the movement of goods in and out, possible product deviations and its monthly profit . In addition, the lack of good inventory management can harm the company's investments, since the company can make purchases without analysis, generate product obsolescence and create a very large stock unnecessarily, which can even cause the depreciation of products.
With good inventory management, organization as one of the practices to reduce costs in companies, you will be able to control the capital needed to be invested, preventing the accumulation of products that are not in high demand and preventing idle stock from depreciating and/or spoiling. It will also be possible to recognize which products are the most profitable and most sought after by customers, so the company will be able to know which supplier has the best cost-benefit to meet the demand for these products.
Schedule your free diagnosis!
Pillars for good inventory management
Demand forecast
To do this, the company needs to analyze the demand for products. This is an important parameter, as it allows for future predictions and enables action planning according to the imagined scenario.
Read also about demand forecasting
Minimum stock and replenishment
The company must have a stock level that allows for a variety of product parts in order to offer customers a choice. However, this stock level must be constantly balanced to prevent parts from becoming obsolete.
To achieve this, the company needs to have adequate management of input and output flows , so that it will be possible to predict purchasing needs, reduce losses due to product expiration/depreciation and obtain better negotiation conditions with suppliers.
Also read about how lack of stock leads to customer loss
Inventory control tools
In this way, the use of inventory control tools can provide a visualization of products and production processes individually. This makes decisions more sustainable and consequently reduces the need for working capital. Consequently, capital is no longer invested in product storage costs and unnecessary batch purchases and is now available for investments in actions that attract new customers.
Below are some tools that can be used to help with inventory management:
Stock control model: this can be a spreadsheet and must contain the record (characteristics, quantities, price and stored volume) of all the company's products.
Material input and output spreadsheet: record of the entire flow of input (purchase) and output (sale) of products, do not forget to include items considered lost.
Online inventory system: it is an automated way of recording items in stock, since manually feeding different spreadsheets or product registration forms is very hard work and requires a lot of attention. In addition, the online inventory system provides reports that can be analyzed and used as a strategy within the company.
Learn how to organize your company with the 5S method
How to improve your inventory
The quantity of stored products must be balanced. In this sense, control allows the optimization of this process by analyzing the turnover of goods and sales possibilities.
Margin of losses and damages
At certain times, losses will occur, in some cases, there may even be a loss on the purchase and sale, which is the case with expired items or defective products. Due to this problem, it is extremely important to establish a limit on losses and damages. In addition, the company must always seek to stay within this established target .
Learn more about strategic goals for your company
Storage costs
Storage control in small and medium-sized companies involves costs related to the space used, the team assigned to the activity, the management systems adopted, and losses and damages in the production processes. Therefore, the cost must be assessed and efforts must be made to increase storage efficiency .
Learn more about financial control!
Promotion of discontinued products
Furthermore, items that are not moving should follow a specific strategy to prevent them from getting stuck and taking up space. Therefore, the ideal is to offer discounts or promotions to sell them at a lower price and stop them from being stored. Therefore, avoiding unnecessary accumulation of products and increased storage costs.
Problems measuring the input and output of products in your company? Product obsolescence? Difficulty viewing stored products? Too much stock?
Are your products spoiling/depreciating and you can't control it? Is your investment in products too high and you don't see any return? If the answer to all these questions was yes, you need to pay special attention to the management of what is stored and to your production processes! Inventory management is one of the practices to reduce costs in companies.
Many companies ignore inventory home owner database management simply because they are unaware of the basic principles of good management. Failure to pay attention to inventory management is a very serious mistake that can compromise the structure of the business. After all, inventory control is one of the pillars that ensures business efficiency and reduces costs and losses.
To better understand the importance of inventory management we first need to understand:
What is Inventory Management?
The idea is basically to monitor stored products to ensure that demands are met without excess and losses, in other words, to manage your company's material resources.
This inventory management control is essential for the company to check the movement of goods in and out, possible product deviations and its monthly profit . In addition, the lack of good inventory management can harm the company's investments, since the company can make purchases without analysis, generate product obsolescence and create a very large stock unnecessarily, which can even cause the depreciation of products.
With good inventory management, organization as one of the practices to reduce costs in companies, you will be able to control the capital needed to be invested, preventing the accumulation of products that are not in high demand and preventing idle stock from depreciating and/or spoiling. It will also be possible to recognize which products are the most profitable and most sought after by customers, so the company will be able to know which supplier has the best cost-benefit to meet the demand for these products.
Schedule your free diagnosis!
Pillars for good inventory management
Demand forecast
To do this, the company needs to analyze the demand for products. This is an important parameter, as it allows for future predictions and enables action planning according to the imagined scenario.
Read also about demand forecasting
Minimum stock and replenishment
The company must have a stock level that allows for a variety of product parts in order to offer customers a choice. However, this stock level must be constantly balanced to prevent parts from becoming obsolete.
To achieve this, the company needs to have adequate management of input and output flows , so that it will be possible to predict purchasing needs, reduce losses due to product expiration/depreciation and obtain better negotiation conditions with suppliers.
Also read about how lack of stock leads to customer loss
Inventory control tools
In this way, the use of inventory control tools can provide a visualization of products and production processes individually. This makes decisions more sustainable and consequently reduces the need for working capital. Consequently, capital is no longer invested in product storage costs and unnecessary batch purchases and is now available for investments in actions that attract new customers.
Below are some tools that can be used to help with inventory management:
Stock control model: this can be a spreadsheet and must contain the record (characteristics, quantities, price and stored volume) of all the company's products.
Material input and output spreadsheet: record of the entire flow of input (purchase) and output (sale) of products, do not forget to include items considered lost.
Online inventory system: it is an automated way of recording items in stock, since manually feeding different spreadsheets or product registration forms is very hard work and requires a lot of attention. In addition, the online inventory system provides reports that can be analyzed and used as a strategy within the company.
Learn how to organize your company with the 5S method
How to improve your inventory
The quantity of stored products must be balanced. In this sense, control allows the optimization of this process by analyzing the turnover of goods and sales possibilities.
Margin of losses and damages
At certain times, losses will occur, in some cases, there may even be a loss on the purchase and sale, which is the case with expired items or defective products. Due to this problem, it is extremely important to establish a limit on losses and damages. In addition, the company must always seek to stay within this established target .
Learn more about strategic goals for your company
Storage costs
Storage control in small and medium-sized companies involves costs related to the space used, the team assigned to the activity, the management systems adopted, and losses and damages in the production processes. Therefore, the cost must be assessed and efforts must be made to increase storage efficiency .
Learn more about financial control!
Promotion of discontinued products
Furthermore, items that are not moving should follow a specific strategy to prevent them from getting stuck and taking up space. Therefore, the ideal is to offer discounts or promotions to sell them at a lower price and stop them from being stored. Therefore, avoiding unnecessary accumulation of products and increased storage costs.