Stock Availability: Ensuring the Inventory Supply
Due to political, economic, technological, and social factors, the global marketplace is continually evolving. In that same space, small and medium-sized enterprises (SMBs) are trying to remain competitive in their inventory and stock availability.
In the retail business, 43% of retailers ranked inventory management as their #1 biggest day-to-day challenge. Additionally, 43% of small businesses still do not track their inventory and continue to use a manual process. As tight competition seeps in, those who have the goods have the advantage.
The need to ensure stock availability
Many businesses fear stockouts. 21% of buyers shift to another store to buy their favorite brand if it’s out of stock in the previous store.
Since businesses face the risk of stockouts, damaged reputation, and reduced profits anytime, preparations should take place as soon as possible. To meet demand, some companies will mostly resort to storing high quantities of each stock holding unit (SKU).
However, this decision may not be a good idea as it will negatively impact your stock turnover rate. There are other ways to effectively manage your stock availability and handle well this issue without risking company resources.
Strategies to cope up with the demands.
Use a modern inventory system and equipment to avoid inaccurate data.
Implementing a cloud-based inventory system should be the first step to avoid discrepancies and allow transparency. It is not only time-consuming to keep track of items using pen and paper, but it can also lead to errors.
Hence, it’s most beneficial to use a POS or inventory system that changes inventory levels automatically as you push up your sales, so you don’t have to worry about updating your database manually.
Another recommendation is that you can make use of RFID technology. It enables merchants to monitor and search for items using a handheld scanner. Using RFID makes monitoring faster and easier for inventory managers to track down the items and their stock availability status.
Manually checking items takes too much time and costly if it allows errors to happen. Also, these strategies are useful if you have multiple locations as they will enable you to manage various warehouses from a single primary location.
Regularly perform physical stock availability checks.
If you don’t track them and update them, you can’t have precise numbers. While modern equipment and inventory systems can effectively monitor your stocks, you still need to control the number and quality of the actual items you have.
This is when a physical inventory check needs to happen. Set scheduled time to print the current inventory. Afterward, compare that what is on paper coincides with what is in your warehouse.
Implement demand forecasting
This strategy involves anticipating demand, as the term indicates so that you can determine what products you want and when.
By using your judgment and stock factoring, past sales, and other indicators such as seasonality, economic conditions, etc., you can try to predict the demand on your own. Analyzing these statistics will give you an insight into how the target market would receive the goods on a particular timeline. It also gives you an insight on when you should make sure your stock availability is just right.
There are also software solutions online that can aid inventory managers analyze and create a demand forecast.
Pay attention to consumer trends
Yes, there is considerable analytical data based on the demand forecast. However, consumer trends in your market still are unpredictable. Are there new products to which people gravitate? Are there styles that make a return?
Take note carefully, act immediately, and prepare to meet the demand with your corresponding stock availability before competition arises.
Equip Your People
Invest in your employees’ better training. Make sure they don’t just know how to operate the entire flow but execute it with efficiency. If possible, have the training done by a reseller, technology partner, or consultant to ensure proper and appropriate training.
However, it’s not just about training your employees to be efficient workers. There are times when the management must spend to boost their morale. Happier employees are self-motivated and work smarter to produce better results. Therefore, companies should continue to find ways to empower them to meet demands and ensure stock availability.
Processes drive the entire flow altogether. With that, you need to create a critical process flow that details out the supply chain and assign key people to monitor every step.
Who is responsible for the items received? Who should line the shelves? At what stage, and who is responsible for reorganizing products?
Have it all on record. It makes both you and your co-workers understand and execute the flow properly.
Communicate well or build great relationships with your suppliers
Failure to deal effectively with or interact with suppliers can result in missed or delayed orders, which may lead to out-of-stock items in your inventory.
To avoid this, work well on your communication, to begin with. Get all the orders and deadlines ready, then make sure everyone is on the same page. Also, you should be prompt and let your suppliers know as soon as possible about any issues you encounter so they can react quickly.
For example, if an item sells faster than expected, do not wait until the inventory is low before any action is taken to restock. Call your suppliers and schedule your next order. The availability of your stocks matters.
Consider sharing data and predictions with your suppliers as well, so you can collaborate on both consumer ordering and timing.
Management is the key.
Overall, effective inventory management and stock availability is the core element of a retailer’s success. When you streamline the process and organize inventory accurately, the rest of your supply-chain activities will fall into place. Without proper management, you welcome a series of unfortunate events such as shipping issues, out-of-stocks, overstocks, etc.