Experiencing business growth is a great sight for any entrepreneur. But, while growth brings in higher revenue and new opportunities, it also leads to an increase in inventory. To ensure the business continues its upward trend, sound inventory management is key, and with the right strategies, the business will always have enough stock on hand to meet customer demands and maximize sales. In this article by Complete Packaging Products, we’ll explore the best inventory management strategies businesses should implement to keep up with their growth aspirations.

 

    1. Following the FICO Approach

 

The first in, first out (FICO) approach is used by businesses in all industries worldwide, as reported by Investopedia. As the name suggests, this technique involves selling the oldest inventory first, which makes complete sense as goods can expire or get damaged the longer they stay in storage. This is especially the case for businesses that sell perishable goods.

 

Following the FICO method will help your business maintain a healthy inventory turnover ratio and minimize losses due to damaged goods.

 

Following the FICO method will help your business maintain a healthy inventory turnover ratio and minimize losses due to damaged goods.

 

    2. Digitizing and Tracking Your Stock Levels

1. Basing the amount of inventory you need based on guesswork is futile as you are bound to

over or underestimate the requirement

1. . For instance, a product may have a high demand for a short period of time, during which you order a high stock assuming that it will all be sold. However, shortly after demand plateaus, you are stuck with goods that cannot be sold, resulting in a loss of money and space in the warehouse.

That is why every item that enters your warehouse has to be tagged, scanned, and stored in a specific slot. This allows you to keep track of inventory levels in real-time and manage it according to the demand and supply of goods. Additionally, rather than following a paper-based approach to creating and storing inventory receipts, convert documents into PDFs and upload them to inventory management software. If you’ve never created PDFs before, don’t fret, as you can convert it here within a few clicks!

 

    3. Hiring a Warehouse Manager

 

As the owner, you do not want to spend most of your time tracking inventory each day. The smart option is to hire an experienced warehouse manager to manage this task for you. A warehouse manager will:

 

1. 1. • Keep track of incoming and outgoing inventory
      • Ensure that the warehouse is clean and secure and that goods are stored at the required temperature
      • Calculate inventory-related ratios and present findings

 

The number one benefit will be that you’ll save hours each day which can be dedicated towards other important areas of the business.

 

Benefits of Inventory Management

 

Now that you have a better idea regarding how to go about managing inventory, let’s dive into the benefits sound inventory management practices provide:

 

1. 1. • Keeps Wastage to a Minimum: Accurately managing inventory means that you always purchase and store the right amount of stock. As a result, no excess resources are spent on procuring and storing unwanted goods.

 

1. 1. 1. 1. • Improves Customer Satisfaction: Having goods in stock leads to customers receiving their orders during the provided time frame. This results in higher customer satisfaction compared to competitors and a strong brand image.

          

1. 1. • Provides the Benefit of Automation: Not only does inventory management software keep track of goods in real-time, but it will also update required ratios and budgets automatically. Saving you and your employees numerous hours each day to dedicate to other tasks.
   2. 1. Establishing an LLCPurchasing, storing, and selling inventory involves entering into contracts with other businesses. While this is a standard business practice, disagreements and problems can arise, and if you’re running the business as a sole proprietorship, your assets and personal finances come at the risk of litigation.According to ESCA News, the best way to protect yourself from such risks is to establish a limited liability company. With an LLC, your business is considered a separate legal entity, keeping your personal assets safe and secure.Having an effective inventory management system is essential for a growing business. Following the FICO approach and digitizing the inventory process is bound to keep costs in check. Additionally, remember to hire an experienced warehouse manager who will ensure your inventory is safe and accounted for.