Here are five key inventory planning challenges and how you can solve them. Determine if your current staff can adapt to vast changes in how you do business. Then decide if you need to hire new staff with different skill sets, reassign or retrain your current team. For example, if you employ many low-skilled workers to count inventory, you may not need them with a perpetual inventory system. Further, they may not be able to help you set up your new software or troubleshoot it after installation.
Overstock negatively affects your cash flow and can cause excess inventory problems, like storage and damage. If you sell perishable items like food and cosmetics, it’s even more important to control your inventory effectively. Small businesses often start out with a manual tracking system for inventory control. You may not think that an automated inventory system is necessary for your stock inventory. Supply chain management is how you manage your process for acquiring or creating products up until the products are sold.
Even today, you can’t maximize revenue when sales orders go unfulfilled, but you have to carry excess inventory when items aren’t moving. Use this quick-reference chart to review common inventory management challenges and suggestions for how to overcome them. The loss of inventory due to spoilage, damage or theft can be a supply chain problem. Inventory management controls at the warehouse is labor-intensive and involves several steps, including receiving and putaway, picking, packing and shipping. The challenge is to perform all these tasks in the most efficient way possible.
You decide accounting periods based on the business needs, but you don’t track inventory daily or continuously. Once you conduct the physical inventory, you shift the balance in the purchase account into the inventory account. Finally, you adjust the inventory account to match the cost of the ending stock.
Retailers concerned about accurate inventory forecasting can also rely on data-driven solutions to ensure they don’t run out of their best-selling items. Shopify POS apps like Stocky can largely automate much of the work of examining historical sales data and calculating reorder points. While calculating rockstar strip club lead time can help retailers plan for busier shopping periods, stores run the risk of stockouts if they fail to take lead time demand into account. To calculate lead time demand, retailers can multiply the average lead time in days for a given product by the average number of units sold per day.