Sage inventory management techniques continued
Sage inventory management is a highly customisable inventory management process. While the optimal process will be different for every company, every business can benefit from removing human error from stock control management, which means taking advantage of Sage inventory software.
We previously discussed several Sage warehouse management techniques that will save you money, and we are continuing that theme today by discussing several strategy specific goals to implement within your organisation that can complement your Sage inventory management solution.
The following five techniques will help you improve your Sage inventory management—and cash flow.
1. Set minimum order levels
Make your Sage inventory management easier by setting minimum and maximum order levels for each of your products. Minimum order levels are the minimum amount of product that must always be in stock and maximum levels stop you from overstocking on items. When your inventory stock dips below your predetermined levels, Sage inventory management can automatically raise a purchase order to replenish your stock level. This can be set as your “minimum reorder level”. Sage inventory management solutions always give you real-time data and a true insight into your warehouse, which means you can monitor stock levels at the touch of a button.
Although setting minimum order and reorder levels requires some research and decision-making upfront, having set levels will help you automate your process of ordering and make it easier for you to make more informed decisions quickly.
Just remember that conditions change over time, so it is worthwhile reviewing your minimum order and reorder levels on a regular basis so you can make changes accordingly.
2. First-In-First-Out with Sage inventory
Following the “first-in, first-out” (FIFO) principle, can help your warehouse get to grips with inventory management. First-in, first-out is the technique of selling your oldest stock (first-in) first (first-out) and replacing your old stock with your newest stock. FIFO is especially important for perishable products, so you don’t end up with unsellable spoilage. Having FIFO in place helps you to avoid under-appreciating the costs associated with your inventory and therefore, losing money in the process.
FIFO is not only useful for perishable products; it can also be a good idea to practice FIFO for non-perishable products. Packaging design and features often change over time within industries and by ensuring that your oldest stock is always sold first you can minimise the risk of ending up with obsolete stock that cannot be sold.
3. Manage relationships
The ability to adapt is a key quality to have when it comes to successful inventory management. A strong relationship with your suppliers is vital, by building strong relationships, you will have more insight into the availability and lead times of products, get insights into new trends and hopefully solve any supplier issues faster. Whether you need to return a slow-selling item to make room for a new product, restock a fast seller quickly or troubleshoot manufacturing issues. It’s important that your stock control solution has this information readily available for you and a Sage stock control solution can help you to be more agile and adapt to changes in the market.
4. Contingency planning
In an ideal world, your operations would run seamlessly day in, day out. However, there are many issues that can be related to inventory management, if you don’t have the right stock control solution in place. These types of problems can cripple unprepared businesses.
- Unexpected sales increases leading to stock oversell
- You run into a cash flow shortfall and can’t pay for a product you desperately need
- Your warehouse doesn’t have enough room to accommodate your fluctuations in sales
- Miscalculations in inventory
- Obsolete stock takes up all your storage space
- Manufacturers run out, or can’t supply your products that are required to complete orders
However, with an inventory management solution like Bit Inventory 50 or Bit Inventory 200, you can prepare to avoid these unexpected issues. Bit Inventory provides you with a solution to quickly capture stock transactions in real-time so your stock reports are always up to date, you can set minimum and maximum order levels so you never run out of stock or over order, you can check supplier balances and manage your cash flow as well as manage stock locations and bins to help maximise storage in your warehouse.
5. Accurate forecasting
A large part of effective inventory management comes down to accurately predicting demand. Make no mistake, this is incredibly hard to do, especially if your employees are having to do this manually. There are countless variables involved and you’ll never know for sure exactly what’s coming—but you can try to get close. Here are a few things to look at when projecting your future sales:
- Trends in the market
- Year on year comparisons
- This year’s growth rate
- Guaranteed sales from contracts and subscriptions
- Seasonality and the overall economy
- Upcoming promotions and industry news
- Planned additional spend
Creating demand forecasts can help businesses to prepare for seasonal peaks and troughs as well as product trends and events that may change product demands in advance.
Take control with Sage inventory
With an effective inventory management system in place, you can help reduce costs, keep your organisation profitable, analyse patterns and trends that help you predict future sales and prepare the business for the unexpected. This gives businesses a better chance for profitability and survival whilst remaining competitive and agile.
Bit Inventory for Sage can help you to automate reporting, trends, analysis and movements of goods.
It’s time to take control of your inventory management and stop losing money. Choose the right inventory management solution for your organisation and start implementing them today.