Good inventory management, like everything else, starts with good planning. But planning isn’t just the start; it’s the very foundation of effective inventory control. Some people might have heard about it, but only a few people truly understand inventory management. Inventory management, also known as inventory control, touches many supply chain components and includes all the decision-making responsibilities associated with the acquisition and deployment of inventory, including raw materials, works-in-progress, and finished goods.
Your company needs the right inventory control strategies to minimize losses and get the maximum profit from the company's inventory. Now, let’s take a brief look at each of these strategies and how you can apply them to improve efficiency:
1. Product Stock Category
The first inventory control strategy is to provide product stock categories so you can easily track and find them. You can do an ABC analysis as your company's inventory categorization method, this consists of dividing items into three categories, A, B and C: with A being the most valuable and C being the least.
For example; Category A is the smallest category, always reserved for the biggest money makers. Category B products are less important than Category A products and more important than Category C products, while Category C items are marginally important. If there are more than three product categories, then the fourth product can be called Category D.
2. Use an Inventory Control Software
The Internet of Things has changed the world. It influences both the way we live and how we work. An inventory control software also prevents human error, the most typical problem when it comes to handling stock and keeping track of products are coming in and out of a warehouse.
Using inventory control software can give you several advantages, such as: predicting stock requirements, optimizing product stock levels, overseeing the transfer of stock between one warehouse to another, conducting inventory valuations, and tracking shipments.
3. Apply FIFO & FEFO Techniques
Another way to improve the efficiency is to use the First-In-First-Out (FIFO) and First-Expired-First-Out (FEFO) to optimize your inventory. First-In-First-Out (FIFO) is a method that dictates that the earliest produced items in your inventory are the first ones to be shipped out – meaning you get rid of your oldest inventory first. Or, you can use an alternative but similar method which is First-Expired-First-Out (FEFO), in which the products closest to expiration date in your inventory are shipped first.
4. Perform Regular Audits
If your company wants to apply the right inventory control strategy, it’s high recommended to perform regular audits. This stock-taking is necessary to ensure the physical quantity of the products match the data and that all your other strategies are working. Auditing or stock-taking will reduce error rates and improve data accuracy, checking the quantity of product stock faster as the process continues. All you have to do is use a barcode scanner that is integrated with the system to track and check the products.
Well, those are 4 best inventory control strategies that you can apply to improve inventory control in your company. If you want to build a manufacturing company, you should look for an industrial area that has the complete facilities and a strategic location close to transportation routes.
One industrial area that has a strategic location is Karawang New Industry City (KNIC). Located close to the capital city of Jakarta and with a lot of access makes KNIC a suitable area for building and renting warehouses.
In addition, KNIC has 6 access points to national infrastructure such as the Jakarta-Cikampek toll road, the Jabodetabek LRT, the Trans Java line, the Jakarta-Bandung Railway, the Kertajati International Airport, and the Patimban port. In addition, KNIC is also supported by facilities such as premium electricity, natural gas, and fast internet connections to support the performance of manufacturing companies.