Young Upstarts

All about entrepreneurship, intrapreneurship, ideas, innovation, and small business.

4 Must-Follow Inventory Management Tips

When did you last see a factory counting its stock manually? Over the last couple of decades, the manual process of counting stock has slowly faded. Managing inventory is a prime requisite for any business. The more accurate the management is, the better chances you must make full use of your stock instead of keeping it in the warehouse. New businesses often find it difficult to manage their inventory because they simply don’t know where to start.

The following are tried and test strategies for managing inventory that should get startups and small businesses up to speed:

1. Using old inventory first.

The easiest way to calculate the inventory for a given period is to see how much of the old stock has been used. Although there are software applications like ERP and MRP to tell you the number of raw materials required for a project, it is always better to have some extra materials in hand so that you don’t fall short at any stage. So, if there is any leftover inventory from the previous production session, make sure it is used in the next manufacturing session so that they don’t become outdated.

2. Checking or auditing the inventory.

Factories that work with a massive amount of raw materials often have a lot of leftovers. These have to be checked from time to time. There should be an auditing team that reviews the stock to ensure that the remaining stock matches with the stock numbers that were calculated when the raw materials first came in. An easy inventory management tip is to check the unused stock and compare it with the number of units that have been used. This helps in preparing the inventory list for the next manufacturing session.

3. Using MRP software.

The inventory is directly related to production, and any change in the demand from the customers will affect these two sections. With the help of MRP software, you can assess customer demands and keep track of the manufacturing process at the same time. It becomes doubly easier to plan the purchase of raw materials according to the data from the software. The use of MRP has become a must in every manufacturing business because of the accuracy of the data it provides.

4. Using AI to control inventory.

Artificial intelligence has made a tremendous impact across various industries, not the least of which is manufacturing. The combination of AI, Internet of Things, and demand sensors help to cross-reference the data that an ERP system provides. This data will take consumer trends into consideration and the AI system will automatically order the precise amount of raw materials so that the customer demands are met without wasting precious resources.

The objective of inventory management is to balance customer demands and reduce the wastage of raw materials. Implementing these strategies can prove to be just what your business needs to increase manufacturing efficiency and customer satisfaction. Although you’d need to shell out money, it’s a worthwhile investment that will yield positive returns in the long run.

Share

Young Upstarts is a business and technology blog that champions new ideas, innovation and entrepreneurship. It focuses on highlighting young people and small businesses, celebrating their vision and role in changing the world with their ideas, products and services.

Tagged as: ,