SKU is a unique, alphanumeric code that can be scanned and entered into your inventory management system. It is used to track inventory and is typically associated with a product's barcode. Track your inventory with SKUs. Create a Stock Keeping Unit (SKU) for each product so you can easily track inventory.Keep accurate stock records. Make sure your inventory data stays updated in real time based on new orders, deliveries, purchases, and returns.Use an inventory management system. Automate the steps of your inventory management process to increase efficiency and save time.To start, try these inventory management strategies: But you can use inventory control methods and best practices to streamline this process and improve results. When it comes to how to manage inventory, there's no single best way. Inventory management best practices and strategies If your DSI is high, for example, then it takes you a long time to sell your products, and you may need to reevaluate how much stock your order going forward. This inventory management technique helps businesses see how well their sales operations are performing, and how much inventory they need for a certain time period. DSI is a calculation of the average time it takes a company to sell its inventory. So even if your vendor incentivizes you to purchase more, you stick to the EOQ as a set standard.īusinesses can use the Days Sales of Inventory (DSI) method to keep track of inventory. The EOQ assumes that demand remains constant, and it's used as a fixed value for making reorders at the right time. The Economic Order Quantity (EOQ) technique involves calculating an ideal order size that meets customer demand while reducing spend on holding costs and shortage costs. For instance, if based on historical sales data you predict a certain number of sales in the next quarter, you can purchase enough inventory to account for those future orders. Materials Requirement Planning (MRP) involves using sales forecasts to plan inventory needs and make orders. Any delays could lead to lost revenue and frustrated customers. But if customer demand suddenly spikes, the business may not have the stock on-hand to deliver. JIT can help reduce excess inventory and cut costs on storage and insurance. The Just-in-Time Management (JIT) method involves ordering and storing inventory on an as-needed basis or "just in time." With this information, they can pinpoint purchase trends, address any snags in the supply chain, and forecast their needs for future sales. Repeat. Order new inventory again based on customer demand.īusinesses use inventory tracking to monitor stock levels in real time throughout each of these stages.Returns. Track and fulfill return requests, updating inventory accordingly.Point-of-sale system to automatically update inventory once a customer makes a purchase. Purchases. Customers purchase products, triggering shipments and reducing inventory.It may also be insured against damage and theft. Storage. Inventory is safely stored until needed for in-store stocking or fulfilling online orders.Delivery. When the inventory arrives at your business or storage facility, it goes through inspection and sorting processes.Orders. You decide how much of each product to purchase and place orders with your vendors.The inventory management process is spread across these key stages:
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