Inventory Process

For startups, managing the inventory is easy. But when more sales come in as your business grows, that’s when it will be difficult. You could miss some sales, overstocked, and many more errors and problems might arise. On that point, you’ll wonder what you may have missed. What you may have done to avoid it. So let’s prepare for it. On this blog post, I’ll share the most common Inventory Process that well-established businesses use. And this is not just for preparing startups, anyone can use this if you’re having trouble managing your inventory.

What is The Inventory Process?

Let’s start with the basics. Inventory Process is a method of recording, analyzing, and managing the stocks in your physical inventory items. There are a lot of ways to do this, but with a reliable and effective one, you’ll enjoy these benefits:

  • Assure and increase sales.
  • Creates loyal customers.
  • Reduce costs for storage.
  • Less waste or spoiled stocks.
  • Manage multi-channel sales.
  • Inventory forecasting.
  • Effective order management.
  • Report data and analysis becomes centralized and comprehensive.
  • Effective inventory control.
  • Improved process and staff efficiency.

Awesome right? To achieve that, we have to focus on two essential parts of the Inventory Process methods which are: Forecasting and Organizing.

Inventory Process Method: Forecasting

First of all, this is not about doing a wild guess and hoping it will work. Forecasting is about analyzing your sales and marketing data to effectively manage your inventory. In other words, stock level optimization. And to do so, there are three methods that you should keep in mind.

  • Preparing a Safety Stock

A safety stock for each of your items is your back up plan for any issues that a low inventory level may encounter. For instance, a sudden rise on the demands of a certain product. You don’t wanna miss out on those sales, and you don’t want your customers to look somewhere else. Another scenario is a stock issue from the supplier or manufacturer. 

But how will you measure the level of your safety stock? By estimating and analyzing all your quarterly or yearly sales data. So you better have as much. And to manage those data, simply use this formula:

Safety Stock = ( Sales Volume of Top 3 Days / 3 ) – Average Daily Sales Volume

Note: Do not use your Safety Stocks for normal daily sales. Keep it in level and only use it as a backup.

  • Choosing the Correct Reorder Points

In determining when you will need to reorder for new stocks, you have to have a basis. Overstocking may occur if you order too early. On the other hand, you might end up eating your safety stock level if you’re too late. Again, only use safety stock for issues like problems on the supplier or manufacturer that may cause delay to your products. In other words, only for unexpected or uncontrollable events. 

So, to determine the reorder point, you need to analyze the time frame between ordering, delivery, and having the product prepared for sales. Let’s call it the Lead Time. You also need the data of your average daily sales over the past month, quarter, year, or so on. Lastly, the number of safety stock. Here’s the formula:

Reorder Point = (Lead Time in Days X Average Daily Sales Volume) + Safety Stock

  • Figuring out Order Quantity

Economic Order Quantity or EOQ helps calculate how much you need to order. Because it’s important to keep your inventory to the optimal level. It also helps to keep the carrying cost to minimum level. 

This calculation will still depend on your business data. First, you need the number of units sold over a given time period, like a year. That is the Demand. Next is the total cost associated with the per purchase order. That includes staff, transportation, etc.  Lastly, the carrying cost per unit. You can get those data by analyzing all costs incurred on holding inventory in hand such as warehouse rent, insurance, spoilage costs, etc. The formula will be:

EOQ = Square Root of [((2 X Demand) X Order Cost) / Carrying Cost Per Unit]

Inventory Process Method: Organizing

Determining how you’ll organize your inventory in the warehouse is also important in managing it. Here we have three methods or tips that you can use.

  • ABC Analysis

This method helps determine which one to prioritize over the others. All you have to do is divide all on-hand inventory into groups A, B, and C. You can also have a D to E or so. But that depends on your business industry. The groupings should go like this:

A items are: high value with low sales frequency.

B items are: moderate value with moderate sales frequency.

C items are: low value with high sales frequency

You could also make up a label for each level of sales frequency. But this will determine which group should be closer to the Packing and Shipping Area. 

  • FIFO or First-In-First-Out

This is the most common and simplest method yet effective. What has been stored first should be the first one to be packed and shipped. This is to avoid older items to be stuck in the warehouse and prevent damage, decay, or passing expiration date.

  • Simple Location Labeling

When naming or labeling the warehouse area, row name, shelf number, etc., sticking with simple letters and numbers will keep everything organized. Therefore, the products will be easy to find by your team, and it won’t be hard for new recruits to learn it. For example, one of the warehouses is labeled as Area 1. Inside there are Rows that you can name A1, A2, A3, and so. Then on every row, there are shelves. You can label them Shelf 1, Shelf 2, and so on. 

Pro Tip: To make this task easier, go automatic. An Inventory Management System or Program is available nowadays. Invest in the high-grade one to minimize errors and discrepancies. Go for the one can do things such as: automatically assigning counting tasks to team members with barcode scanners, smartphone-enabled, instant stock updates, etc.

See Also: IDEAL INVENTORY LEVEL, WHY IS SAFETY STOCK IMPORTANT?

Social Share:

sbobet 88

Slot Deposit Pulsa 10k

Slot Deposit

Slot Server Luar

Daftar SBOBET

Situs Judi Slot Terbaik dan Terpercaya No 1

Slot Deposit Pulsa

Casino Online Uang Asli

daftar sbobet

Slot Bonus New Member 100

Slot Deposit Dana

Akun Pro Thailand

RTP Slot Gacor Hari Ini

Slot Deposit Via Pulsa

RTP Slot Gacor

Slot Deposit Dana

daftar sbobet

Akun Pro Kamboja

Slot Online Deposit Pulsa

agen sbobet

Slot Deposit Ovo

RTP Slot Pragmatic Tertinggi Hari Ini

RTP Slot Hari Ini

sbobet88

Slot Deposit Via Dana

Depo 50 Bonus 50

Depo 50 Bonus 50

RTP Live

Live Casino

Depo 50 Bonus 50

SBOBET

Slot Deposit Pulsa 10rb

RTP Slot

RTP Slot

Bonus New Member

Slot Bonus New Member 100 di Awal

Bocoran RTP Slot Gacor Hari Ini

Slot Deposit Via Dana 10rb

sbobet 88

RTP Slot Tertinggi

depo 50 bonus 50

sbobet 88

Depo 50 Bonus 50

Slot Deposit OVO

RTP Live Pragmatic

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Gacor Terbaru

Judi Roulette Online

Slot Online Deposit DANA

RTP Slot Tertinggi

Slot Gacor Terbaru

RTP Slot

Slot Deposit Via Dana 10rb

Slot Bonus New Member 100 di Awal

Judi Bola Online

RTP Slot Pragmatic

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Deposit Via Dana 10rb

RTP Slot

Slot Bonus New Member 100 di Awal

Slot Gacor

Slot Deposit Via Dana 10rb

sbobet 88

RTP Live

Slot Gacor Terbaru

RTP Slot Tertinggi

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Deposit Via Dana 10rb

sbobet 88

Bocoran RTP Slot Gacor Hari Ini

Slot Bonus New Member 100 di Awal

Slot Gacor Terbaru

Slot Deposit

RTP Slot Tertinggi

Rolet Online

Roulette

RTP Live Pragmatic

Bakarat Online

RTP Slot Gacor

Slot Bonus New Member 100 di Awal

RTP Live Pragmatic

Bonus New Member

Slot Gacor Terbaru

Slot Deposit

RTP Slot Tertinggi

slot online

slot online

RTP Live Pragmatic

slot online

Slot Deposit

Roulette

Depo 25 Bonus 25

Slot Gacor Terbaru

Roulette

Slot Gacor Gampang Menang

Slot Bonus New Member 100 di Awal

Agen Roulette Online

Slot Deposit Via Dana 10rb

slot tergacor

Agen Roulette Online

Slot Deposit Via Dana 10rb

sbobet 88

Slot Gacor Terpercaya

Slot Gacor Terpercaya

slot gampang jackpot

Akun Pro Kamboja

Judi Bola Online

Agen Casino Online

Agen Casino Online

sbobet 88

Slot Deposit Via Dana 10rb

Slot Deposit

slot gacor gampang menang

Casino Online Uang Asli

Bakarat

Slot Deposit

Casino Online Uang Asli

Depo 25 Bonus 25

Slot Bonus New Member 100 di Awal

Agen Roulette Online

slot gacor gampang menang

sbobet 88

RTP Slot

Slot Gacor Terpercaya

Agen Casino Online

RTP Slot Pragmatic Tertinggi Hari Ini

Slot Deposit Via Dana 10rb

Slot Deposit Via Dana 10rb

Slot Gacor Hari ini

slot gacor gampang menang

Agen Roulette Online

RTP Slot Tertinggi

Agen Roulette Online

Slot Bonus New Member 100 di Awal

Depo 25 Bonus 25

slot Gacor Terbaru

slot gacor gampang menang

Judi Bola

Slot Online Bonus New Member

Slot Gacor Online

Situs Judi Bola

Depo 25 Bonus 25

Slot Online Bonus New Member

Slot Gacor Resmi

Slot Gacor Gampang Menang

Slot

situs slot gacor

slot gacor

IDNPLAY

Situs Judi Bola

slot gacor 2023

situs slot gacor

Situs Slot Gacor

Slot Gacor Hari Ini

Slot Bonus New Member 100 di Awal

Slot Deposit Via Pulsa 10rb

Slot Gacor Maxwin

Situs Slot Gacor

slot resmi

situs slot gacor

Slot Deposit Via Dana 10rb

Situs Slot Resmi

Slot Gacor Hari Ini

Slot Gacor Hari Ini

slot gacor gampang menang

slot gacor

IDNPLAY

Situs Slot IDN

Situs IDN Slot Terpercaya

Daftar Poker Online

IDNPLAY

togel toto macau

agen poker online

idn poker online

Situs SBOBET

Slot Bet 500

idn play

idn play

Depo 25 Bonus 25

Situs IDN Slot Terpercaya

IDNPLAY

IDNPLAY

Situs SBOBET

Situs Slot IDN

Situs IDN Slot Terpercaya

Link Alternatif SBOBET

poker idn

poker idn

daftar poker online

daftar poker online

slot bonus

Situs Slot IDN

Situs SBOBET

Situs IDN Slot

poker

poker

Depo 25 Bonus 25

Slot777 Link Alternatif

togel hongkong

capsa online

Situs Slot IDN

Slot Bet 500

poker

poker

Slot Bet Kecil

Situs IDN Slot Terpercaya

capsa online

togel toto macau

idn slot online

Slot Bet 500

Situs Slot IDN

idn slot gacor online

ceme online

Poker IDN

domino qq login

Poker IDN

Poker IDN

Situs IDN Slot Terpercaya

Link Alternatif SBOBET

IDN Slot Gacor

Slot 777

IDN Play

poker idn

poker idn

poker online

poker online

Situs Slot777

SLOT IDN

IDN Slot Gacor

Slot 777

Poker Online

Poker Online

poker online

poker online

SLOT IDN

Slot Bonus

IDN Play

IDN Slot Gacor

Slot 777

IDN Slot Gacor

poker online

poker online

Situs IDN Poker

Situs IDN Poker

SLOT IDN

SBOBET88

Slot 777

IDN Slot Gacor

Poker Online

Poker Online

idn play

SLOT IDN

Slot Bonus

Situs IDN Poker

Situs IDN Poker

Slot IDN

Slot Gacor Hari Ini

IDN Slot Gacor

Poker IDN

Poker IDN

Poker IDN

Poker IDN

Slot Bonus New Member

IDN SLOT GACOR

Slot IDN

Slot Gacor Hari Ini

IDN Poker Login

IDN Poker Login

IDN Slot Gacor

Idn Slot Gacor

Slot Bonus New Member

IDN Poker Login

IDN Poker Login

Slot IDN

Slot Gacor 777

IDN Poker Login

IDN Poker Login

Situs IDN Slot

IDN Poker Login

IDN Poker Login

Slot Bonus New Member

Idn Slot Gacor

Slot 777

Slot IDN

situs idn slot

IDN Poker Online

IDN Poker Online

IDN Poker Login

IDN Poker Login

Slot777 Gacor

Slot IDN

Slot Gacor Gampang Menang

Situs IDN Poker

Situs IDN Poker

IDN Poker Login

IDN Poker Login

situs IDN Slot

Slot Bonus New Member

Idn Slot Gacor

Login Sbobet

Agen Sbobet

IDN Poker Online

situs IDN Poker

IDN Slot Gacor

IDN Poker Login

IDN Poker Login

Link Alternatif Sbobet

Link Alternatif Sbobet

Poker

Slot88

IDN Poker Online

IDN Poker Online

IDN Slot Gacor

IDN Slot Gacor

Idn Slot Gacor

Slot Bonus New Member

Link Alternatif Sbobet

Slot Bonus New Member

IDN Poker

Ceme

Ceme

Ceme

Ceme

ceme online

ceme online

ceme online

ceme online

ceme online