If you’re a retailer, you are much familiar with the pain inventory management can cause. Rather than complaining for a lifetime, why not work on improving our in-store processes and try to implement the best practices in-house? Retailers, repair shop owners, vendors – nearly every business can benefit from inventory management best practices that streamline operations and keep inventory, assets, and accessories in check. From correctly balancing stock in your repair to effectively supervising your multi-stores’ inventory, inventory management is essential for keeping businesses up and running and the bottom line healthy.
Whether you have a structure already in place or you are planning to grow your business these 5 inventory management best practices will set you on the right track.
Prioritize Inventory (ABC Analysis)
Sorting your inventory into priority groups can help you understand what do you need more and at what frequency, and which inventory items are important to your repair shop. Experts typically suggest segregating your inventory into A, B and C groups, that is basically called ABC Analysis. ABC is an order of your most to least valuable items. ABC analysis lets you review inventory items and then labeling them with an A, B or C:
- ‘A’ type parts consist of about 80 percent of all parts used but account for 20 percent or less of inventory stock.
- ‘B’ type parts consist of about 25 percent of usage but account for about 30 percent of inventory stock.
- ‘C’ type parts consist of about 5 percent of usage but account for about half of the inventory stock.
A group is the biggest one and items in the A group are higher-ticket items that you need fewer of. Items in the C category are the items that are less costly and whose inventory turns over quickly. The products in B group are those items that are moderately priced and move out the door more slowly than C items but more quickly than A items.
Focus on Stock Levels
The best way to identify how much stock you need is, maintaining a minimal stock level. A minimal stock is the nominal amount of safety inventory you are willing to keep on hand before refilling your supplies. This quantity level is never fixed and should be adjusted when needed according to the circumstances.
The goal is to find your inventory sweet spot – where you have the lowest possible inventory levels without being understocked – in order to maximize growth and profitability for your business. Stock reviews can be full of inaccuracies if done manually on paper. One of the finest ways to reduce errors and mistakes is, automating your inventory management processes. Luckily, RepairDesk does it for you! You can keep a record of all inventory items, categorize them in groups, count on-hand quantity, transfer inventory from store location to another. Furthermore, in a few clicks, you can create a ‘Purchase Order’ to easily replenish your stock with the best repair shop software at your store.
Track Inventory in Real Time
To effectively track all the inventory items, make sure that you keep a record of the product information you have for items in your store. Information should include SKUs, barcode data, suppliers, product quantities and parts’ status. You may also consider tracking the cost of each item over time so you’re aware of factors that may change the cost, like if the item is no more trending or if its new version is released.
Here’s a big no to manual inventory tracking, manually staff members simply can’t keep track of all of the parts as they move in or move out and it doesn’t facilitate communication among suppliers or allow you to make corrections or adjustments to your inventory quickly. Real-time inventory tracking via proper inventory management system allows your repair shop to have your system automatically update as items are moving in and out of stock locations. This makes your inventory system data current with the actual physical items you have in your location.
Forecast inventory demands
Did you know that Amazon earns more than one-fifth of its North America retail revenue because local stores can’t forecast accurately? It isn’t wrong to say; “Out-of-stock is out-of-luck”. It’ll be a big problem for you and may cause the loss in long terms, if you run out of a product or something is expiring and you don’t know it.
Demand forecasting helps businesses effectively manage cash flow and maintain smooth operations. If you’re carrying extra stock or don’t have enough to meet demand, you’re losing money. Forecasting will also help you in understanding when you need to order new products, and how much they’ll need to get.
Use a Cloud-Based Inventory Management System
Automate the inventory management process as much as you can. The most important thing a retailer can do when it comes to inventory management is to use a software or cloud-based POS system that does the heavy lifting for you.
RepairDesk makes your life easier by helping you manage your work effortlessly and with just a few clicks. We have everything – from creating repair tickets to inventory management and more. Get a FREE trial of the best POS software for cellphone repair stores and see it for yourself!