Managing inventory is an integral part of every business, irrespective of the size, volume and turn around. It refers to the process of ordering, storing, transporting and utilising the company’s inventory, until it is sold. This also involves managing the required raw-materials and machinery that are needed to produce the finished good.
An inventory manager ensures the smooth flow of goods from the manufacturer’s location to the warehouse and finally to the point of sale. Although it might sound simple, it actually involves a lot of challenges, especially when the inventory size is large. The risk of theft and damage of goods during transit, must be taken care of. If the goods are damaged during the process, then the company undergoes huge losses as these goods are usually sold off at throw away prices.
These are few of the reasons why inventory management is essential:
- It controls the total cost of inventory by effectively maintaining a healthy balance between the delivery cost at every stage and the final ordering cost.
- Helps to calculate the exact inventory of raw materials required for smooth production.
- Prevents stock-out issues, thus ensuring that the production flow is continuous.
- Minimises losses by controlling damage, over-stocking and wastage.
Believe it or not small business inventory management has never been an easy affair. A lot of companies have suffered huge losses due to lack of systematic inventory management process. While even today the manual way of keeping a track of inventory is practiced, there are few companies that are changing the trend and going the automated-data capturing way.
Let’s look at the different tools that small businesses use to manage inventory:
- General Inventory Excel Spreadsheets – To manage any kind of data, the Excel sheet is the most convenient and effective tool. It is rather the starting point for managing inventory. Although it is best suited for micro-businesses, it does not serve the purpose for large firms as this process requires manual entry of data on a regular basis.
- Bar Code Scanning – This process is best suited for large scale companies where the size of inventory is huge. In this process the data is automatically captured with the help of barcode scanning. All the scanned data is automatically collated in an app and can be accessed from anywhere. It is one of the fastest and the most accurate process of tracking and managing inventory.
- Small Business Inventory Software – This is by far the most popular method that is convenient for both small and medium-sized organisations. With the right inventory software, you get instant analysis of your stock, manufacturing processes and operations through a visual dashboard. The best part about this kind of tool is that you can access it even on your mobile phones. Katana is one such tool that is highly preferred by small companies to manage their inventory.
Handling inventory is critical and thus, managers need to understand the various aspects of planning, tracking and updating their inventory. Choose a tool which can analyse your output and help you identify the gaps. There are many tools that provide automated reports on a periodic basis, which can be further used for making future business decisions.