Let’s face it—your ecommerce business needs inventory. With it, you can sustain success. But go without it, and you’re well on your way to swiftly closing your doors.
Inventory management is both an art and science. Having too much inventory on hand can cost you more money and eat into your profits. Yet at the same time, if your items go on backorder (especially during peak seasons) due to low stock, you’ll deal with angry customers. That’s why it’s so valuable for your business to understand how to keep track of inventory well.
When you have a warehouse (or even multiple warehouses) full of goods and orders to fulfill, managing your inventory can easily become challenging. However, if you follow the right steps, you can achieve successful inventory management in any business season.
Advantages of Knowing How to Keep Track of Inventory
Knowing how to keep track of inventory maintains supply chain efficiency and helps your business stay competitive in an increasingly demanding consumer marketplace. Key advantages of understanding how to keep track of inventory include:
- Better Reporting Accuracy - when you have a good handle on your inventory amounts, you can have more accurate accounting and financials for business decisions.
- Maintaining Stock - if you know how to keep track of inventory, you can ensure you’re not running out of stock, which means you’re not missing out on sales as well.
- Focusing on the Right Products - as you track inventory, you can determine which products sell and which don’t, discounting unpopular products to put more money (and shelf space) into those that sell quickly.
- Cutbacks on Loss or Theft - understanding how to keep track of inventory can help you quickly discover any workplace theft or misplaced items so you can respond accordingly.
- Satisfied Customers - tracking inventory thoroughly ensures you have stock on hand to fulfill customer orders on time and quickly remedy any incorrect shipments.
6 Strategies on How to Keep Track of Inventory in Your Business
Select a Modern Inventory Management System
If you want to know how to keep track of inventory well, the first step is saying goodbye to an outdated inventory management system based on pen and paper or even spreadsheets. Instead, use cloud-based inventory management software or a WMS that provides real-time inventory data, analytics, and even automated reordering capabilities.
Optimize Your Warehouse Space
To properly keep tabs on inventory and maintain efficient receiving and fulfillment, your warehouse space needs to be organized with inventory labeled correctly. This also means ensuring your inventory is spaced well for pickers to move freely and quickly. Your warehouse floor plan should also be easy to navigate for inbound and outbound shipments.
Apply Demand Forecasting
Knowing how to keep track of inventory involves understanding the demand your products generate. By analyzing past demand and historic sales figures, you can predict the amount of inventory you’ll need in the future, called demand forecasting. This ensures you’ll have the right inventory levels on hand for busy shopping seasons, such as the holidays.
Track Product Information
A hallmark of grasping how to keep track of inventory is always keeping tabs on product information. To do this well, creating internal SKUs for every item in your inventory is important. SKUs combined with barcode scanners allow you to quickly track inventory levels and product locations within your warehouse during daily activities.
Schedule Inventory Counts
Even with inventory management software in place, counting your own stock periodically is still an important aspect of how to keep track of inventory. An inventory audit can be performed as a periodic spot check, an annual stocktake, or a rotating cycle count (even a mixture of all three). Counting your inventory can catch any inaccuracies, discover losses, and prevent theft.
Keep Buffer Stock Handy
Experienced businesses that know how to keep track of inventory well will have a supply of buffer stock on hand for various items, especially during busy selling seasons. This extra safety stock provides back up in the event of unexpected demand spikes in order to avoid shortages that would frustrate your customers.
The SMART Way to Keep Track of Your Inventory
Knowing how to track your inventory is essential to maintaining a thriving business. That’s why partnering with a reliable 3PL is a savvy way to ensure inventory management success. At Smart Warehousing, we offer comprehensive logistics solutions and cutting-edge inventory management technology. From warehousing to fulfillment, transportation, and more, we can give you inventory tracking peace of mind. Contact us today to get started.