Inventory management is an important part of running a business, especially for those who have product-based businesses. Implementing good inventory management can guarantee stock availability without experiencing excess or shortage of goods.
This will help the business run efficiently while avoiding losses due to uncontrolled stock. However, what needs to be noted is that inventory management is not just about recording incoming and outgoing goods.
There are special strategies that you need to do so that your stock of goods remains optimal and your business can continue to grow. Want to know how? Read this article until the end!
What is Inventory Management?
Inventory management is the process of managing and controlling stock of goods in business operations. The goal is to ensure that goods are available in the right quantities and at the required time, without causing waste or shortages.
In business, inventory can be in the form of raw materials, semi-finished goods, or finished products that are ready to be sold. Therefore, good management will greatly influence the operational efficiency and profits of the company.
Pentingnya Manajemen Persediaan bagi Bisnis
Why is inventory management so important? With proper management, you can avoid losses due to uncontrolled stock. Here are some of the main reasons:
1. Avoid stock outs
Out of stock can cause loss of customers. If stock is not available when customers need it, they can turn to competitors. This will have an impact on decreasing sales and customer loyalty.
2. Prevent excess inventory
Did you know that too much stock can increase storage costs and the risk of goods expiring? This is because products that cannot be sold for a long time can experience a decline in quality or even become obsolete. This can ultimately be detrimental to the business.
3. Increase operational efficiency
With well-managed inventory, the production and distribution process becomes smoother. This is because sufficient stock will ensure that business operations are not hampered due to delays in raw materials or required goods.
4. Increase customer satisfaction
Pelanggan akan lebih puas jika barang yang mereka butuhkan selalu tersedia. Ini artinya, jika kamu dapat memenuhi permintaan pelanggan dengan lebih cepat, mereka akan lebih cenderung kembali untuk melakukan pembelian berulang. Bahkan, bukan tidak mungkin akan membantu mempromosikan produk serta layanan kepada orang terdekat.
Effective Strategies in Inventory Management
In order to manage inventory well, there are several management strategies that you can try, including:
1. FIFO and LIFO methods
FIFO (First In First Out) is a method where the goods that come in first must go out first. This method is especially effective for businesses that deal with products with a limited shelf life, such as food and medicine. Through this method, the risk of expired goods can be minimized.
Meanwhile, the LIFO (Last In First Out) method is often the choice for goods that do not have a limited shelf life, such as construction materials or electronic goods. With this method, the newest items coming in will be sold first, so the business can adjust the selling price to the most recent purchase price.
2. Use of Inventory Management Software
Using inventory management software will help businesses track stock more accurately. Some commonly available features include:
- Real-time stock tracking. With this feature, you can monitor incoming and outgoing goods at any time. This will help avoid recording errors and ensure stock is always well controlled.
- Low stock notification. The system will provide notifications if stock starts to run low. That way, you can reorder on time without worrying about running out of items.
- Analyze sales trends. This feature helps in determining the ideal stock amount for each product. By knowing sales patterns, business owners can manage inventory more efficiently while avoiding excess or shortage of stock.
Also read: Business Planning: Definition, Objectives and Important Elements
3. Determine Safety Stock
Safety stock is the amount of reserve stock stored to anticipate sudden increases in demand or delays in supply. If there is a surge in demand or there is a disruption in the supply chain, safety stock will help the business continue to operate without interruption.
4. Conduct regular inventory audits
Regular checking of inventory is essential to ensure compliance between records and physical stock. Some audit methods that can be applied include:
- Inventory taking. Thorough stock checking in a certain period with the main aim of ensuring data accuracy. Through this method, business owners can find out the actual stock amount and avoid discrepancies between records and physical stock.
- Cycle counting. Stock checks are in small quantities but are carried out periodically to detect and resolve non-conformities more quickly. This method can be said to be more efficient than stock taking, because it does not interfere with business operations.
5. Analyze Sales Trends
Knowing sales patterns will help in planning inventory better. For example, if there is a product that sells better in a certain season, you can increase stock at the right time to meet market demand. In this way, businesses can avoid running out of goods or excess stock that is not needed.
Good inventory management can be said to be the key to business success. By implementing the right strategy, you can ensure that stock of goods is maintained so that operations are more efficient and customers are more satisfied.
For MSME business people who want to make it easier to manage operational activities, the Labamu application can be a practical and effective solution. Through the available features, every business owner can monitor stock in real-time, manage transactions more easily, and increase business efficiency. Come on, register now and increase your business!
