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With so much competition in today’s modern age it is more important than at any time in the past for companies to exercise effective inventory management. While more companies are relying on automated systems for inventory management, there are still smaller companies that still rely on hand counts.
It is unimportant how your company chooses to exercise inventory management. The important thing is to have procedures in place that will tell department managers and purchasing agents when it is necessary to order new raw supplies or replenish finished goods inventories.
In order to know how to use inventory management to maintain your company’s vast inventories, you must first assess your company’s needs. If you are starting a new company, it may be necessary to conduct some research into the markets of your competitors.
You will need to grasp some kind of idea how much inventory you will need to maintain and to establish proper reorder points. Until you have been in business for some time this will be a difficult task thus the reasoning behind establishing some kind of assessment of the business model of your competitors. Hiring a fulfillment company can help you by giving you flexible storage space so you can increase or decrease your inventory according to your needs.
Those companies that have been in business for some time should already have a plan for inventory management either manual or automated. There is a need to not only have a tracking system for inventory on hand but also establish reorder points. One thing to keep in mind as you work with your business partners to establish reorder points is these are subject to seasonal changes. For instance, if your company produces products that are typically used during the summer, you will need to establish higher reorder points during the peak of your production season. While you may always have customers that buy on a monthly basis, you need to accommodate those times when business is better. The tools that most fulfillment centers offer their clients can help you track your inventory levels.
Do you want to utilize the new technology in order to maintain inventory management without the need to conduct hand counts of inventory on hand? While computerized point of sale systems are wonderful time-saving tools, they are not infallible. In addition, there is always the possibility that an employee will fail to scan incoming and outgoing inventory on occasion. Therefore, even with point of sale inventory management you still want to establish provisions for conducting manual hand counts of inventory–depending on the size of your business either semi-annually, quarterly, or monthly. Do not get into the habit of relying entirely on computerized inventory control.