Focus on making your inventory easy to access, separate, and count. Work on providing visibility, ease of labeling, and simple organization so that your counters can quickly access each item.
There may also be state or federal laws dictating how you are required to store certain types of inventory, particularly for dangerous or controlled items.
Choose and set up storage shelves and bins depending on the type of inventory you will be storing in them. Consider the required size, height, and special attributes of the bins or shelves when choosing yours. For example, think about how heavy a shelf full of your inventory will be and choose a shelving system that meets or exceeds that weight requirement. Keep in mind that inventory kept on store shelves must also be counted in an inventory system. You can also use slotting to improve ease of use. Slotting refers to the placement of inventory in an efficient manner. For example, items that are typically shipped together might be placed close to one another in the warehouse. In addition, inventory should be set up such that the inventory with the highest turnover is the most accessible. Slotting should be planned from the start and then revised over time to account for new items and changes in demand or operations. Ideally, slotting should be rethought weekly or even daily. You should also consider getting rid of infrequently-sold and obsolete items as fast as possible. The odds that they will sell are low and many times these items are costing you more to store than they will bring in. [2] X Research source
Make sure that the scanner is designed for your environment. For example, a hospital might need scanners that can be sterilized. You will also need a barcode printer to label shelves or spaces where the item with that barcode is stored. If you run a small operation, you may also choose to simply download an app that allows your employees’ mobile phones to be turned into scanners. [3] X Research source
Use a column titled “Date of Count” to record the present date. Use the “Previous Quantity” column to record the quantity of this item from the last count. Use the “Quantity on Hand” column to record the total counts for each item. Include a unit of measure. Use the “Product Description” column to provide a description of the item(s) being counted. Use the “Build-To” column to represent the amount of items required on hand to meet projected demand. Use the “Amount Sold” column to represent the amount of items sold during the prior period. Use the “Cost of Sales Percentage” column to represent the cost of each item as a percentage of the cost of total sales. Use the “Amount to Produce or Reorder” column to automatically produce the number of items to purchase or produce to meet the demand of the next sales period. [4] X Research source You can also use accounting software such as Quickbooks or Peachtree to manage your inventory levels. [5] X Research source
Focus on the most critical items first. Split up your items into three categories based on how frequently they sell. For example, try setting your high priority items as those items that make up 80 percent of your sales. Then, you can create medium priority and low priority categories for items sold less frequently. Once you have done so, you can focus the vast majority of your effort on your high priority items. This effort includes counting, forecasting sales, and reordering. Once this is done, you can use excess time for your medium and low priority items. Doing so will save you from wasting time on low-performing items. [10] X Research source
Have one individual perform the physical count by calling out the numbers aloud. The other counter will enter the numbers into the appropriate field in the master inventory spreadsheet as they are called. However, this doesn’t necessarily have to be done at the same time. Inventory can simply be taken twice by different individuals. The figures can then be compared to ensure the accuracy of the inventory taken.
This figure represents how long it takes for your purchased inventory to be converted into sales, on average. You can then work to reduce this figure by ordering a smaller amount of inventory or working to get quicker payments from customers. You can also find your inventory to sales ratio by dividing your inventory value by your sales for the month. Track this value over time to see if it is increasing or decreasing. An increasing inventory to sales ratio means that you are purchasing too much inventory, while a decreasing one means that you should purchase more. [12] X Research source
Research inventory management software packages online to find one that fits your needs. Popular providers include Oracle and SAP. [15] X Research source Your choice of software will depend on your specific needs (volume, type of inventory, etc. ), your budget, and your conversion time (how much time you can spare to implement a new technology). [16] X Research source
Reduce potential theft by employees by restricting access to product areas to those who absolutely need to be there. Reduce spoilage losses by staying on top of your inventory count practices. Remember to cycle older stock forward when shelving inventory. [17] X Research source
