Right Inventory Planning Will Save You Money!
Many of the small businesses spend little time administering their inventory. Not that they want to spend more on it but that they do not have enough time to administer it. In order to ensure that they get the right kind of rewards then, they need to spend adequate time to ensure that the Inventory Planning is right. To do this, you need to identify your requirements and plan accordingly. How will go about doing your Inventory Planning?
Let us list the steps involved.
1. Identify the products that move and the once that do not. It is a fact that all the products in your inventory does not move at the same speed. It is also true that the inventory planning need not look at all the products in the same way. There are products that are moving faster at all periods. There are others that are not needed for the next two months. There are certain others which are high valued but move very scarcely. Now, any inventory planning manager should ensure that he has analyzed the situation well and has put up all the key ingredients that make up the situation for you. The key step in your Inventory Planning is therefore, identifying the fast moving items, the slow moving items, the non moving items and accordingly sort them out.
2. The second step in your Inventory Planning will be to identify the items according to their values. The ideal system that could be used will be the classifications of the items using the A, B and C method. A group items will be the costlier ones that would amount to 5% of the stocked quantity in terms of numbers but will be taking up the 75% of the value of the items. These are also called the high value items. It is common to find that these high value items are the ones where you need to spend effort to save money. Even if you can save on one piece you will save large amount of money. The B group items are the ones that will have 20% of the volume and 20% of the value whereas the C groups are the ones that will have 75% of the volume but only 5% of the value with them. These really need not attract much of your attention. With this, you will know where you need to concentrate and not take everything that comes by. 3. Finally, to do an effective Inventory Planning, identify the right kind of software for the purpose and have it installed in your company. This will help you produce timely reports and the correct ones, to ensure that you have all the information to take effective managerial decision. It is also important that the software you choose satisfies all the requirements that you find to be part of Inventory Planning.
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