Saturday, May 12, 2012

Tips On How To Manage Your Inventories

To run a business successfully, you need to take stock of every important element that is essential to keep your products moving and managing inventories is one among them. Every business that produces goods or offers servicing of products has stock of physical goods, which have economic value. The goods that are in different forms at different phases such as processing, packing or the goods maintained for future use are inventories.
Types of inventories
Depending on the nature of business, physical stock can be classified into many types. A business that manufactures products keeps stock of raw materials and necessary consumables for production purposes. The company also holds stock of goods that are semi-finished awaiting completion at various stages of production. Servicing is an inevitable part of any manufacturing unit and hence businesses in manufacturing have spare parts in their stock to enable servicing of products. Apart from spare parts, defective products and scrap also are part of physical stock as they carry economic value.
Importance of inventory management
If you aim to have a successful stint in your business, you need to ensure that stock management is highly professional. Proper management of inventories ensures that you meet the demand of the users on time with prompt supply and avoid excess or deficit stock that would play a crucial role in the economic growth of your business. Thus, you maintain the goodwill of the users by producing quality products on time and you ensure that you do not have any stock remaining unused and idle thus affecting your economy.
How to manage inventories?
Managing your stock needs to be done in a professional manner taking into account various factors that affect a trade. Let us have some ideas on effective management of inventory.
  • Attach importance to the nature of the stock. Most of the physical stock lose their value while remaining idle. Maintaining stock occupies space, power, handling charges and so on. Hence, ultimately, maintaining inventory beyond the specific period will lessen the value and it is essential to first analyze how important it is to hold an inventory.
  • Periodical review of inventory and management policies is essential. It is not advisable to follow specific rules with regard to managing your inventories.
  • Classification of stock based on their values will help you to have a proper management system. You need to identify the items that retain value even if shelved for a long period and items that need to be used or disposed as fit to save yourself from the risk of losing money.
  • Make your move based on market study. The market is not the same and you need to read the pulse of the users, which would give you a clear picture of what to store and what to clear. If you are in a business where the trend changes very frequently such as the fashion industry, you cannot afford to hold your stock for long. These are the times, which demand you take appropriate steps to clear off the goods.
  • Be updated with the latest techniques in the market. Keeping in mind the importance of inventory management, new techniques are being introduced. Make the best use of them to manage your stock and improve your economy.

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