Managing inventory is a crucial task for small and medium-sized businesses (SMBs). Without the right system in place, you might face stock shortages, excess inventory, and rising costs. But don’t worry—there are practical solutions that can make a big difference.
In this guide, we’ll break down the basics of inventory management, share best practices, and explore what the future holds for this essential part of your business. Whether you’re struggling with stock levels or looking for ways to streamline your process, this guide will help you understand the key steps needed to manage your assets efficiently and keep your business running smoothly.
What is inventory management?
It is the process of tracking, storing, and ordering products, whether they are raw materials or finished goods. It ensures businesses have enough stock to meet customer demand without overstocking, which ties up capital and increases storage costs. Effective stock control involves monitoring stock levels, knowing when to reorder, and ensuring products are stored efficiently.
A good system helps businesses avoid stockouts, where products are unavailable, and overstocking, which can lead to wasted resources. Key components include setting reorder points, maintaining safety stock (extra stock for emergencies), and understanding lead times (how long it takes to receive new stock).
Why should you use an inventory management platform?
A reliable platform is crucial for efficiently tracking goods, automating reordering, and forecasting demand. It helps businesses avoid costly issues like stockouts and overstocking by providing real-time visibility into inventory levels. The platform streamlines processes, reduces manual errors, and saves time, especially for growing businesses.
These platforms are not just tools for today—they are integral for businesses preparing for the future. As eCommerce and omnichannel retail models continue to expand, SMBs need systems that are flexible and scalable to keep up with growing customer demands.
Alternatives to an inventory management platform include using spreadsheets or manual tracking systems, which can be time-consuming and prone to mistakes. These methods lack automation and scalability, making it harder to manage goods as a business grows or as demand fluctuates.
What should a good platform do?
For SMBs, having an effective inventory system in place is crucial. A good platform should:
- Track stock in real-time: This ensures you always know what goods you have on hand, helping avoid stockouts or overstocking.
- Forecast demand: The system should help predict future inventory needs based on past sales data and market trends.
- Automate reordering: It should allow automatic reordering of items when stock levels reach a certain point.
- Integrate with other business systems: Seamless integration with accounting, sales, and supply chain systems ensures accurate data and smooth operations.
- Provide detailed reporting: Analytics and reports should give you insights into stock levels, turnover rates, and slow-moving products.
- Enable scalability: As your business grows, your platform should be able to handle larger volumes of stock, multiple locations, and an increasing number of SKUs.
Investing in strong inventory management software can prevent common problems like overselling or holding onto dead stock, helping you save money and time.
How to choose the right platform for your business?
Effective inventory management doesn’t happen by chance. Here are some key things to think about, when choosing the right platform specific to your business:
Understanding the needs for your business
Not every product has the same demand. Some products may sell quickly, while others sit on the shelves. Using stock management software that offers real-time tracking and sales analytics can help you identify which items need to be reordered regularly and which can be kept at lower levels.
Possibility to implement Just-in-Time (JIT) inventory
A JIT approach means you only order stock as you need it, reducing the amount of capital tied up in stock. This can be especially beneficial for SMBs with limited storage space or budget. However, it’s crucial to have reliable suppliers to ensure timely delivery.
Set minimum stock levels
The ability to set minimum stock levels that trigger automatic reordering when inventory drops below a certain point is crucial. This ensures you won’t face stockouts and miss potential sales.
Use ABC analysis
ABC analysis helps businesses categorize their stock based on importance. “A” items are high-value products that need tight control, “B” items are mid-range products, and “C” items are low-cost, high-volume goods. By focusing on the most valuable items, you can optimize your stock management efforts.
Review your inventory regularly
Don’t let your inventory become a “set it and forget it” situation. Regular reviews of your stock levels and performance data are critical for staying agile and responsive to changes in demand.
Additionally, reviewing slow-moving items or those with long lead times helps in refining inventory strategies. This ensures that stock isn’t sitting idle, freeing up resources and cash flow for your business.
Embrace technology
Systems for managing inventory are getting more advanced, with features like automation, mobile access, and AI-powered forecasting. Investing in robust inventory management systems can save you time and minimize errors.
Why Is inventory management important for SMBs?
It plays a key role in keeping costs low, improving cash flow, and ensuring customer satisfaction. For SMBs, where budgets and resources are often tight, good system can make a significant difference in overall profitability. By using the right tools and practices, you can prevent costly mistakes and ensure smoother day-to-day operations.
A complete solution from boomerang
Boomerang offers a complete solution for small and medium-sized businesses (SMBs) to manage inventory and fulfillment. With over 20 years of experience in e-commerce logistics, Boomerang helps SMBs by providing a web-based Warehouse Management System (WMS). This system gives real-time visibility into inventory, tracking lot codes, expiry dates, and serial numbers. It helps businesses avoid stockouts, overstocking, and outdated products.
Boomerang’s fulfillment centers in Northeast and Central Europe reduce shipping times and costs, improving customer satisfaction. The service also includes a dashboard that provides 24/7 updates on stock levels, orders, and tracking information.
Additionally, Boomerang ensures fast and accurate order fulfillment. By using advanced software to validate shipments, they prevent mistakes like mis-packs and delays. With discounted shipping rates and service-level guarantees, SMBs can save money and improve their overall logistics process. Boomerang’s all-in-one solution covers warehousing, shipping, and returns management, making logistics easier for SMBs.
Get in touch to re-evaluate your inventory management
Is your current inventory management system working for your business? If you’re looking to improve efficiency, reduce costs, or simply explore new solutions. We can help you re-evaluate your stock management system and take your business to the next level.Get in touch with Boomerang today!
