11 Inventory Control Management Best Practices and Techniques for 2021

11 Inventory Control Management Best Practices and Techniques for 2021

inventory control management

It might seem obvious that inventory control management is the very lifeblood of any ecommerce business. But what’s surprising is that it’s also one of the most under-optimized (if not downright neglected) areas of operation for many companies. 

In 2018, a survey of over 1,100 SMEs found a shocking 43% of respondents relied on a manual inventory control process. Some, astoundingly, didn’t track inventory at all

Even for those slightly better-off businesses using clipboards and Excel sheets, the future is worrisome, especially if there’s any desire to grow. 

Uncodified and chaotic, DIY inventory control management systems are massively prone to human error and are simultaneously too simple and too laborious to keep up with a company’s expanding and diversifying operations.

Why is Inventory Control Management Important?

Numerous academic studies have found a strong correlation between the implementation of carefully considered, methodical, standardized inventory control management practices, and a demonstrable lowering of costs and an increase in profits. 

So why aren’t more businesses compliant? The number one reason seems to be a lack of education on what inventory control and management actually is (first of all, they’re two separate steps in one overarching process—more on that below), and why it’s so critical. 

And if business leaders don’t know what they should be doing, and maybe even more importantly, why they should be doing it, the whole process just seems bulky and impractical—a discouraging, hugely error-prone time-suck that keeps employees busy with data entry when they should be doing their actual jobs.

Poor inventory control management results in either grievous stock-outs or burdensome dead stock, along with a loss of consumer confidence and increased operational costs. 

Any one of those deficits can kill an organization, especially an emerging one. And these dangers have never been as grave as they are right now. With the emergence of the coronavirus pandemic in early 2020, there’s been a seismic upset in supply chains the world over, leaving millions of businesses reeling as they try to figure out how to keep inventory flowing into their factories and back out to their customers. 

Verizon’s “State of Supply Chain Inventory Management,” a study conducted from early 2020 through July of that year to examine the impact of COVID-19 on businesses, found that even as economies have reopened worldwide, most companies are still in full-on survival mode. 

Simply put, organizations are desperately trying to secure the materials they need now that their established supply chains have been disrupted. Nearly 71% of the professionals surveyed in this study said inventory control and management was one of the key areas businesses had to reform to cope with the shifting landscape. 

Things may seem dire, but there’s a way out and a way forward. 

It’s important to be realistic about the risks of failing to optimize inventory control and management processes—but the good news is, there are a multitude of solutions. 

The first and most important step is to achieve a clear, meticulous understanding of the why’s and how’s. Next, that understanding needs to be understood and internalized by all your employees. This way, all stakeholders and employees in your business are invested in adhering to a gold standard of inventory control management. 

Inventory Control Management Best Practices

1. Sort Your Inventory Into Categories

Things get messy when you treat every product in your warehouse the same way. The truth is, not all products are created equal.

You may know how much inventory you have and where it’s going, and yet still be blind to the actual value each product brings to your organization. This is especially pertinent in eCommerce operations with more than one SKU.

The answer is to think about products as belonging to certain categories. There are several ways to categorize your inventory, but the most popular way is the ABC categorization method (also known as ABC analysis).

ABC analysis is a way to sort products into three categories (A, B, and C respectively) based on criteria of your choosing. 

The A category typically contains your most valuable products and the smallest percentage of your inventory. You’ll find your “mid-tier” sellers in the B category, and the C category contains the least valuable products in your inventory.

A product’s “value” to your business can be measured in different ways. Some ways to think about value are:

  1. The cost to the customer
  2. The COGS (cost of goods sold) to the business itself
  3. Customer demand for the product

Once you’ve categorized your inventory and better understand what truly brings revenue to your business, your entire world opens up.

You can now make business decisions informed by actual data rather than gut feelings. Plus, it makes all the following best practices much simpler to implement.

2. Reorient Your Warehouse Layout for Maximum Efficiency

An ABC analysis is usually one of the most eye-opening exercises you can perform on your business operations. It gives you data-backed insights on the products that truly add value versus the ones that only seem like they do.

Perhaps after your ABC analysis, you evaluate your warehousing space and realize all your low-value products are situated near the processing area. Meanwhile, all your highest value SKUs are tucked in a corner of the warehouse. 

Time in a warehouse (especially during busy seasons) is measured in seconds, not minutes. Every time a warehouse employee (or you if you’re processing things yourself) has to walk to the other side of the warehouse to pick and pack a product, they’re wasting precious seconds. 

As a general rule, you’ll want to physically orient products in your warehouse in accordance with your ABC analysis. That means the highest-value items are immediately situated next to your packing and processing area while your “B and C” SKUs occupy the low-traffic portions of your warehouse.

The time savings may seem insignificant at first. But compounded over weeks or months, it makes a big difference in your overall efficiency. 

3. Use a Dynamic Inventory Management System

We can’t get much deeper into these best practices without recommending a dynamic inventory management system. We use the word “dynamic” intentionally — not just “electronic.” 

You can throw together an electronic inventory management system in Excel or Google Sheets. But that isn’t dynamic. It’s not bringing in real-time data from incoming and outgoing inventory.

It also lacks any sort of built-in forecasting or barcode scanning capabilities (not to mention the many other features of a dedicated platform).

As you grow, your logistics will only become more complex. Inventory management software (IMS) platforms like SkuVault are built to automate and simplified your core inventory management tasks. This way, you can get out of the minutiae and back to high-level business strategy and decisions. 

All the subsequent best practices can technically be performed without a dedicated IMS, however at a high cost of time (and probably a couple dozen headaches).

4. Implement Barcoding

There are very few technologies invented in the 1950s that haven’t been relegated to footnotes in history textbooks. The humble barcode is among those coveted ranks. 

The barcode’s simple elegance lies in how much raw data can be stored in those classic, nondescript black lines. Especially when you’re up and running with your IMS, you can tie SKU numbers, physical warehouse locations, and even more advanced metrics like lot or batch numbers to your barcode.

Most products are scanned or logged multiple times in their lifecycle before they reach the end-user. Consider this conservative estimate of how many times a single product is scanned: 

  1. When it’s shipped from the manufacturer
  2. When it’s received by your warehouse
  3. When it’s stocked in a specific location
  4. If it’s ever moved within the warehouse
  5. Once it’s picked, packed, processed, and shipped

Now consider if each SKU or product code had to be entered manually. That’s five opportunities for human error (and that’s only regarding one particular unit).

Imagine how inefficient and error-prone the modern supply chain would be without barcodes. For that reason, it’s wise to implement barcodes as soon as possible. 

And the best part? The tech is dirt cheap. All you need is an IMS or electronic system to generate the codes and a barcode scanner. 

This is the best sub-$75 investment you’ll ever make into the success of your eCommerce business. For a deep dive into how to implement a barcoding system, check out our post on the topic here

5. Calculate a Precise Economic Order Quantity (EOQ)

Your EOQ is the minimum amount of inventory you need to order to keep operations flowing. If you overorder, you’re going to run up your shipping and storage costs, which can seriously affect the overhead of your business.

Underorder, of course, and you’ll end up running out of stock, which in turn can seriously affect customer confidence. To calculate an accurate EOQ, you need the following information on hand: 

  • Your annual fixed costs
  • Your demand in units
  • The carrying costs per unit

Remember that you should reevaluate this number at regular intervals, as variables like demand and carrying costs tend to fluctuate.

If you’re interested in learning the nuts and bolts of calculating this metric, check out our post on the topic here.

6. Calculate an Accurate Reorder Point

So now you know how much stock you need to order to minimize your costs. The next question is: When do you need to order it?

Your reorder point threshold is just as essential as your EOQ—knowing the ideal reorder threshold for your business is key to pipeline management. It’s a little more straightforward to calculate your reorder point than your EOQ, so no need for a special calculator.

Here’s the formula: Reorder Point = Lead Time Demand + Safety Stock.

The reports are even customized by SKU and quantity, so you can rest easy knowing you’re optimizing your per-pallet revenue (without the tedium of manual calculations).

Learn more about calculating your reorder point here.

7. Practice Inventory Forecasting

This is an infamously challenging inventory control technique. In fact, inventory forecasting likely poses the biggest challenge for most eCommerce businesses.

While your EOQ and reorder point help you control your current inventory flow, inventory forecasting allows you to anticipate how you’re going to have to adjust your EOQ and reorder point down the line to avoid falling off either side of the horse (overordering or underordering). 

Inventory forecasting is closely tied to sales forecasting and takes into account both past sales and predictions for future performance.

For more information on what exactly demand forecasting is and how to perform it, check out our blog post on the subject here.

8. Develop an Auditing Strategy

In The Office, there’s an episode in which bumbling boss Michael Scott schedules his vacation during an inventory audit specifically to avoid it. You don’t need to have an MBA to understand the shared distaste most of the professional world has for inventory audits. 

However, they don’t need to be miserable, nor do they need to be an all-night affair. When most folks think of auditing, they think of an all-hands-on-deck all-nighter where everyone chugs coffee and either comes in after-hours or on a Saturday to begrudgingly count widgets until the sun comes up. 

That’s actually the least efficient way to audit, and it introduces significant risks to your business. For one, there’s plenty of research that proves what we intuitively know: people make bad decisions when they’re tired. 

This could be as simple as fudging the count to finish sooner or — in the worst-case scenario — stealing product. 

Secondly, these sorts of audits are unnecessarily expensive. They require paying overtime to workers for the extra hours and shutting down all warehouse operations. 

If you’re a small company, you may be able to get away with this, but not for long. If you’re fulfilling multiple daily orders, this will cost your business sales and can put you behind the 8-ball with impatient customers waiting for their products. 

Just like we recommend categorizing your products by value via an ABC analysis, we also recommend segmenting your counts. This is performed through what’s called “cycle counting.” 

We’ve written at length on the topic here, but the general gist is to prioritize counting your highest-value items in more regular intervals than your lower-value items. These intervals are then distributed to warehouse employees throughout their workday, mitigating the need to shut down all operations and miss out on orders. 

Whether or not you choose to utilize cycle counting or another auditing philosophy altogether, you’ll want to schedule these audits on your calendar. Otherwise — and trust us on this — something else will come up. Remember, what gets scheduled gets done.

9. Outsource Logistics to a 3PL

If your growth is getting out of control (not the worst problem to have), you may realize that you want to be a full-time business owner, not a full-time warehouse manager. 

Growth also demands more space (extra warehouses), more work (hiring employees), and more supply chain touchpoints (more complexity). 

If that sounds like an absolute nightmare to you, outsourcing your logistics to a 3PL (third-party logistics) vendor may be the best route forward. 3PL is a massive topic, and we’ve written a definitive guide on what it is and who should utilize it. You can read that here.

10. Conduct regular supply chain audits

eCommerce operations that require a lot of kitting or assembly likely have multiple suppliers or manufacturers from which they order products or raw materials. 

Common examples include handmade jewelry, proprietary formulas, or electronic components. 

It’s important to regularly plot out all these key parts of your supply chain and audit their contributions to your business. This includes things like:

  • Measuring lead times against competitors
  • Measuring cost against competitors
  • Measuring any sort of negative trends (customer returns, defective product) that may necessitate a change

You may realize your lack of profitability isn’t due to any fault of your own, but a faulty link in your supply chain.

11. Utilize Different Supply Chain Methodologies

This strategy is a bit more advanced. You’ll definitely want to make sure you’re equipped with a robust IMS before proceeding. 

The standard supply chain method of ordering product from a supplier, storing that product, and then selling it to the end-user works well enough for most businesses. 

However, there are other supply chain methods that are well-suited to certain types of products or eCommerce operations. 

JIT (Just-In-Time) fulfillment

This is where you order only enough product to fulfill your current or near-future orders. These order numbers are usually based on historical demand and forecasting data.

So, if you know that over the past few years you’ve historically sold 100 units of your flagship product in October, you’d order 100 units (minus your safety stock) for that month. 

The benefit is less capital tied up in unused inventory and almost no risk of dead stock (that’s product that no one ends up buying). 

The downside is that if your forecasting isn’t on point, you can very easily have stock-outs (and thus lose business and customers). 

FIFO (first-in, first-out) fulfillment

We’ve written at length on this method as well, but to sum it up, it’s best suited for perishable goods or for items with a high variance in manufacturing cost. 

As prices fluctuate, the first-in-first-out method of accounting for inventory most accurately represents your COGS (cost of goods sold). We talk more about that in our COGS blog post here

Dropshipping

Dropshipping is where you completely cut out your warehousing operations by signaling the manufacturer to send directly to the end-user.

The benefit of this is obvious — completely eliminating your logistics costs. The downside is that you have zero oversight into quality assurance and you can’t do any sort of custom assembly or kitting that you’d normally do in your own processing workflow. 

So which one of these methodologies do you choose? Circling back to the main point of this tip, you don’t have to choose just one. 

Real efficiency comes from utilizing these different methods on a product-by-product basis. For example, as your business and SKU count grows, you may start selling perishable items.

FIFO is obviously the best supply chain method to avoid waste and facilitate great customer experiences. Further, you may develop partnerships that open you up to selling other people’s products. 

In this case, dropshipping is a viable method to cut costs and deliver already-assembled products directly to the consumer.

Once you’ve gotten control of your inventory management, you can start experimenting with these more advanced methodologies to cut your costs even further. 

What is Inventory Control Management?

Alright, so we’ve reviewed the best practices. If your head is spinning, stay with me. The world of inventory control management can be complex. 

Let’s back up a bit and start with the basics.

First of all, the term “inventory control management” is actually a common misnomer: the phrase condenses two separate, though related, processes into one operation. In terms of hierarchy, the average business should start by tackling their inventory control systems, and then move on to polishing their inventory management methods. Here’s a breakdown of what it all means:

Part 1: Inventory Control Definition

Inventory control refers to the nuts-and-bolts process of tracking and managing the materials a company stores in their warehouse or third-party logistics facility. These processes include things like:

  • Integrating barcodes and scanning procedures
  • Maintaining data on a product’s provenance and current location
  • Updating inventory lists and unit counts in real-time as goods are received and shipped back out
  • Taking those updated inventory lists into account when reordering

Why might you need inventory control? Because without it, you’re never going to have an accurate idea of how many units of a product you have in stock, where that stock physically is in your facilities, and when (and how much!) you need to reorder. 

And let’s not forget tax time: the IRS demands businesses provide thorough, reconciled accounts of their inventory for any given fiscal year. 

So if you don’t follow best practices in this domain, you could face serious losses and even legal consequences; but if you do, you’ll find that efficient inventory control comes with a bevy of broader benefits, such as helping you to calculate an effective reorder point and forecast future sales. 

Part 2: Inventory Management Definition

Inventory management refers to a more expansive, bigger-picture set of processes that oversees how a business controls its materials over the entire sales cycle.

This includes accounting for ordering and purchasing, storage, sales and shipping, and reordering stock. Basically, inventory control handles the nitty-gritty of managing your actual products-in-hand, and thus constitutes one part of inventory management, which takes a more bird’s eye view at how to minimize your inventory costs and maximize your profits. 

It entails methodologies such as:

  • Inventory control (as discussed above)
  • Stock review and forecasting (i.e., looking at current stock levels, past sales, and estimating future demand)
  • Cycle inventory (that is, recounting products at specific points in the fiscal year)
  • ABC analysis (or triaging your stock based on a hierarchy of value)
  • Calculating safety-stock thresholds and reordering points
  • Establishing systems such as bulk inventory management or other methodologies based on an evaluation of your company’s needs (more on this below)

Getting Your Inventory Control Under Control

Let’s say you’re running an SME and don’t have the resources to start up an inventory management department, let alone hire a single inventory manager or consultant. You understand the urgency of tightening up your inventory control protocols, but aren’t sure where to get started, especially given the overwhelming tidal wave of information that’s out there on the internet. 

First of all, rest assured: there are well-established, time-tested best practices out there that you can crib from. Secondly, recent strides in technology have translated into a whole slew of AI-driven and/or cloud-based inventory control and management software programs that can take care of virtually all of these concerns for you. 

The most important thing is to establish a consistent system and methodology. IMS software will only make a poorly designed methodology fail faster. 

In fact, a 2008 study published in the Journal of Business Case Studies by Universitie de La Rochelle’s Ina Freeman looked at two case studies in which small businesses availed themselves of Excel to create adaptable inventory control management systems, which they employed to positive results. 

And even better, those businesses were able to use data gleaned from those Excel-based systems to generate key insights into customer demand and inventory profitability. 

That same study pointed out that only 36% of SMEs can afford professional consultants to help them adopt best inventory control practices—which is all the more reason why taking your education into your own hands is so essential. Here are the fundamental first steps in the race to getting your inventory control processes under control.

Forming Your Inventory Control Management Strategy

It’s paramount that you don’t dive head-first into setting up a new inventory control system without taking a few key considerations into account first. Start by asking yourself these basic questions:

How is my inventory currently organized and can I improve organizational controls? 

The above-cited studies found that many company leaders were only immediately aware of highly visible, often-used products, and weren’t sure how the entirety of their inventory was being managed in their company’s storage facility. 

If that sounds familiar, think about how you can set up controls to create more visibility into how your inventory moves. 

Remember, you won’t be able to successfully complete any of the following steps without knowing exactly what you have in stock, where it is, and how these goods are physically flowing through your sales cycle.

Your best practices here include things like:

  • Creating a system of SKUs (or “stock keeping units”) that are easy to understand and identify. Don’t make the mistake of just copying the product serial number—those codes can be reused, and duplicate identifiers can cause some major organizational headaches. Instead, create a unique SKU whose letters and numbers make sense for your business and make sure each product in your inventory is physically labeled with its own unique alphanumeric code.
  • Just like your products, the different areas in your warehouse or storage facility also need to be identified and labeled, even if it’s as simple as designating a number for each row of shelving units. Then, you can match every SKU to a specific place in your facility, so that you know exactly where a given item is at any given time.
  • Make sure your inventory is being stored in a way that makes sense for your organization. For instance, reserve shelf space near the dispatch area for stock with the highest demand, so that it’s just a step away when each new order comes in. Take advantage of less-accessible areas to store lower-selling products or raw materials.
  • Consider integrating barcodes and scanning protocols. The barcodes can be linked to any unit’s SKU, and scanned at each step of that unit’s journey from arrival at the warehouse, to the packing department, to the shipping department.

When’s the last time I took stock of my stock? Does my business perform regular inventory reviews? 

You know it’s essential to have a sense of the number of goods you have on hand at a given time, but chances are you’re relying on your electronic records for that information. You and your employees may feel too pressed for time to go through the warehouse to verify for yourselves.

However, it’s essential to conduct regular reviews of your inventory to make sure that your electronic records reconcile with what is actually there—shrinkage is real, and needs to be accounted for. 

A helpful hint here: ensure your units of measurement are standardized—ie, consistently keep track of your materials by number of units, or by number of boxes, or by weight, etc.—to make it easier to reconcile your accounts. 

These reviews also provide the opportunity to exercise quality control protocols on your inventory. 

Is my whole team able to track any given unit at any given time? 

Employees in several different positions across your business will likely need to pinpoint where a given order is in the supply chain at a moment’s notice (to see, for instance, if a product is being prepared for shipment, or if it has already been dispatched). 

This can be especially crucial if a given product has been recalled and your team needs to act fast to make sure it isn’t reaching store shelves. If you don’t currently have one, evaluate your options for building an easy-to-use and responsive tracking system.

Electronic inventory control shouldn’t be an involuted process that takes up a lot of your time. Once you’ve assessed the above considerations, there’s just a handful of tried-and-true inventory control techniques, like the Reorder Point Formula or EOQ, that you’ll want to implement to keep everything running smoothly. Here’s a rundown:

Practice inventory forecasting

This is an infamously challenging inventory control technique; in fact, inventory forecasting likely poses the biggest challenge for the average business of the three methodologies listed here. 

While your EOQ and reorder point help you control your inventory in the moment, inventory forecasting allows you to anticipate how you’re going to have to adjust your EOQ and reorder point down the line, to avoid bouncing around those dangerous out-of-stocks/dead stock poles.

Inventory forecasting is closely tied to sales forecasting and takes into account both past sales and predictions for future performance. 

The Bigger Picture: Perfecting Inventory Management

Once you’ve got your inventory control processes on lock, you’ll then have the well-earned capacity to look at bigger-picture protocols and start finetuning your inventory management systems. 

Implementing a simple, yet scalable inventory management system is key to minimizing costs, maximizing profits, and ensuring the longevity of your business.

The Major Influences on Inventory Management Protocols 

Above, we saw that the first step to implementing gold-standard inventory control methods is to evaluate your current operations. Here, too, the first step is to reflect on a few key pre-existing factors that will influence how you design your inventory management procedures.

Here’s a breakdown of some decisive questions:

What’s the state of my business’s finances? 

A fluctuating economy means shifting financial considerations for your business, so it’s sound practice to periodically take stock (no pun intended) of the external financial variables that impact your inventory. These include things like:

  • Calculating the tax owed on your inventory and staying abreast of amendments to tax laws that can affect that amount.
  • Keeping tabs on changing interest rates if you need to take out a loan to make an order (as so many businesses do, especially when first starting out and building stock levels). Interest rates can be wildly variable depending on the larger economic picture, so staying on top of these trends can help you negotiate the most favorable rates for your company.
  • Managing operational costs, like expenses associated with shipping inventory (which will be a constantly evolving amount, depending on the current cost of fuel) or renting a third-party logistics facility for storage. If you stay up-to-date on these numbers, you can periodically check-in with your venders to see if you can negotiate more favorable terms to bring those costs down.

How are my vendor relationships? 

All the best inventory management planning in the world isn’t going to help you if you don’t have reliable vendors, or if your relationships with your suppliers are contentious. 

Don’t succumb to the temptation to contract a vendor just because they’re offering you the best deal—ask yourself if your vendors have a solid industry reputation and if their operations are robust enough to meet the needs of your business. 

Of course, even the most stellar of suppliers can find themselves in a pinch depending on what’s going on with the global supply chain, as we’ve all seen throughout the coronavirus pandemic—so be sure you have a second and third option in place if your primary vendor can’t come through. 

And also make sure you nurture and support your vendor relationships—your business can’t go it alone, and those vendors are supplying the lifeblood of your company.

Could my products have a more efficient lead time? 

The amount of time it takes from ordering your product to that unit’s arrival (whether to your warehouse, or to the customer’s home) depends on a multitude of variables. 

Does your inventory include rare, hard-to-source materials? Do you outsource fabrication to foreign factories, or do you hire local artisans? 

If you find your lead times are affecting your bottom line, taking a look at these factors could help you conceptualize different production models that might reduce those times.

Who can I count on to manage my inventory? 

We’ve seen above how it’s essential to provide access to inventory control data to your whole team so they can make informed decisions, communicate effectively with vendors and clients, etc. 

You’re also going to be relying on employees across the business to put in a certain number of man hours to keep inventory control and management processes running smoothly. 

But despite all this, inventory management is not a democratic, collective process. Even if you don’t have a whole department dedicated to this area, identify leaders in your business who can oversee your inventory management protocols, provide quality control, and propose tweaks and changes to those protocols as needed according to the situation on the ground.

How does my business fit into the bigger economic picture?

No one is an island, and the same goes for your business. It’s easy to tightly focus on the micro-level of day-to-day operations that we forget to assess how our business is evolving in the context of the larger economic ecosystem. 

In 2020, we’ve all learned some tough lessons about how world events can radically impact our established procedures. Keeping abreast of evolutions across a breadth of markets will help you make better-informed forecasting decisions, and thus bolster the resiliency of your business. 

Top Techniques for Profitable Inventory Control Management

Once you’ve gone through the above questions and analyzed how your answers can affect your approach to managing your inventory, you can make an educated decision in selecting the techniques that are most applicable to your operations. 

Here’s a rundown of the top methodologies for effective inventory management:

Bulk Inventory Management

As its name implies, this technique involves ordering materials in bulk (as opposed to, for instance, on a per-order basis) and then reordering once you’ve hit your safety-stock threshold. 

A lot of businesses go this route, because they save in costs on that initial wholesale order, and don’t risk running out of stock (as long as they’ve accurately calculated that safety-stock point). 

This is best for organizations with an established sales history they can draw on to make accurate inventory forecasts, and which have the cash flow to make those big orders and pay for long-term storage. 

If you’d like to know more, check out our post on bulk inventory management here.

Just-in-time Inventory Management

As opposed to bulk or wholesale inventory management, the “just-in-time” method basically takes the opposite approach: here, businesses always keep a low stock level, only reordering as orders come in, and often avoiding going out-of-stock by only a matter of days. 

The appeal here is the massive savings on inventory storage, which can be a real boon to an organization with a healthy cash flow and a relatively simple sales structure. 

However, as that 2008 Journal of Business Case Studies paper pointed out, just-in-time inventory management is not suited for companies with low overall turnover or who deal with low-cost items. This is because frequent shipments are often costly enough to outweigh the savings gained on storage. 

First-in-first-out (FIFO) Inventory Management 

The first-in-first-out (or FIFO) technique, on the other hand, is the most advantageous approach for SMEs with low turnover, because it prioritizes the shipment of the oldest goods in the inventory.

Automating Your Inventory Control 

So here’s the good news: thanks to modern technology, almost all the processes we’ve been reviewing so far can be completely automated.

This translates to huge savings in terms of time, effort, and costs. Some hands-on, “IRL” work will always be involved, such as performing your inventory reviews. 

But reconciling your inventory records, calculating your EOQ and reorder point, generating accurate inventory forecasts—a solid IMS can do all this heavy lifting for you and significantly mitigates human error.

We’d love to show you how simple it is to transform and optimize your organization’s inventory management practices from the ground up. Sign up for a live demo with our team today.

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