Ever heard the old adage, “Cash Is King”? Smart distributors and manufacturers know that inventory management is king in their warehouses because they understand how much of an investment their inventory represents. For them, inventory flow is cash flow. If your facilities include a warehouse, check out today’s important advice for managing your inventory stock like your cash.
Make an intelligent investment when you use the ERP-integrated inventory management software that’s been delivering customer value since 1989. Contact Scanco online or at (877) SCANCO-1 to learn more about how you can build your company’s worth with well-managed inventory stock.
Treat Your Inventory Stock Like the Stock Market
Your inventory stock is an investment, so it should pay off like your other investments. In order to ensure that outcome, follow these simple “investment” steps for warehouse managers.
Be Careful with Your Stock Purchases
Of course, there’s a difference between inventory stock and the stock market, but your approach to stocking your warehouse should share similarities to the way you’d purchase stocks for your portfolio. That’s because, just like stocks and bonds, your inventory stock is eventually meant to be converted into cash.
Smart investment strategies are the same as your warehouse management strategies:
- Select stock with high value and low risk
- Carefully track the performance of each of your stock items so you know when and how to sell
- Build relationships with suppliers (AKA brokers) who can help you negotiate your purchases
- Know in advance when your stock is likely to go bad
- Track your gains and your losses, in real-time, for all of your stock
Even if you know nothing about investing, these rules probably sound familiar to you. That’s because they’re exactly the way you should deal with your raw materials and finished goods.
Reduce Your Carrying Costs
Some stocks are dead weight in your portfolio, and they’re a lot like the dead weight inventory stock in your warehouse. Most investors feel they shouldn’t have to pay astronomical fees for their portfolio managers to shuffle around worthless stocks that never pay off. Likewise, you’d be completely right if you felt you shouldn’t have to pay high storage fees for worthless inventory stock that’s still sitting around.
Nevertheless, it happens.
Usually, it’s because people weren’t managing their portfolios very well, or hadn’t realized their stocks had lost all their value. If they’d known in advance their stock value was going to plummet, or perhaps if their stock had an expiration date or something (wink wink, nudge nudge), they probably would have tried to sell as much stock as they could before it all went bad.
With real-time tracking and labeling software for your warehouse, you can stay up to date with all the important details about your inventory stock, such as expiration dates, warehouse movements, bin and location transfers, sales figures, 3PL inventory counts, and more—and you can use your increased insight to move out inventory stock nearing the end of its life.
Manage your warehouse like your stock portfolio and keep them both profitable when you sell off everything that looks like it’ll spoil soon. You’ll be glad you did.
Don’t Let Your Assets Fall through the Cracks
Managing a stock portfolio requires you to check in regularly and track the value and progress of each investment. Similarly, managing a warehouse requires you to check in regularly and track the progress of your inventory stock.
Your inventory is like cash in your warehouse: you need to monitor it closely. Not only should you perform counts so you know how much inventory you’re supposed to have at all times, you should also ensure you have real-time data on the movement of your inventory stock around your warehouses.
Smart distributors and manufacturers use various tracking methods to keep constant tabs on their inventory, including:
- RFID tags – “Active” RFID tags use a battery-powered transmitter to relay data during transit, and “passive” RFID tags include a microchip and antenna so data can be accessed remotely.
- NFC tags – “Near Field Communication” devices are part of the Internet of Things (IoT), and they look like stickers with tiny microchips in them. They share data with nearby smartphones, which can automatically pick up information from the microchip.
- Barcodes – The classic method for track-and-trace technology, barcoding software empowers companies to easily scan items during receiving, transfer, picking, and shipping for error-free data at all times.
These methods help you keep watch over your inventory, so you can be sure it doesn’t disappear and leave you liable for costly replacement charges.
Invest Smarter with Inventory Management Tools
Every portfolio manager will tell you stocks are a long-term game, and that the people who do best with their investments are the ones who make strategic purchases with a focus on gradual, consistent growth.
Your business is exactly the same. All your investments, including those of your inventory, should focus on long-term consistent growth. Of course, the more money your business has tied up in old, expired inventory, the less you’ll have to spend on development … so you’ll want to ensure you always have a strategic plan for inventory management and that you have the tools you need to succeed.