Tracking your stock as it moves throughout your warehouse is commonly called
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Especially for larger apps with lots of moving parts, inventory management can become complex, encompassing several techniques and strategies. Let’s take a look at some inventory control techniques you may choose to utilize in your own warehouse. Show
Economic order quantity.Economic order quantity (EOQ) is a formula for how much inventory a company should purchase with a set of variables like total costs of production, demand rate and other factors. The formula identifies the greatest number of units in order to minimize buying, holding and other costs. Minimum order quantity.Minimum order quantity (MOQ) is the smallest amount of inventory a retail business will purchase in order to keep costs low. However, keep in mind that inventory items that cost more to produce typically have a smaller MOQ, as opposed to cheaper items that are easier and more cost effective to make. ABC analysis.This technique splits goods into three categories to identify items that have a heavy impact on overall inventory cost.
Just-in-time inventory management.Just-in-time (JIT) inventory management is a technique in which companies receive inventory on an as-needed basis instead of ordering too much and risking dead stock (inventory that was never sold or used by customers before being removed from sale status). Safety stock inventory.Safety stock inventory management is extra inventory that is ordered and set aside in case the company doesn’t have enough for replenishment. This helps prevent stock-outs typically caused by incorrect forecasting or unforeseen changes in customer demand. FIFO and LIFO.LIFO and FIFO are methods to determine the cost of goods. FIFO, or first-in, first-out, assumes the older inventory is sold first in order to keep inventory fresh. LIFO, or last-in, first-out, assumes the newer inventory is typically sold first to prevent inventory from going bad. Reorder point formula.The reorder point formula calculates the minimum amount of stock a business should have before reordering. A reorder point is usually higher than a safety stock number to factor in lead time. Batch tracking.Batch tracking is a quality control technique wherein users can group and monitor similar goods to track inventory expiration or trace defective items back to their original batch. Consignment inventory.If you’re thinking about your local consignment store here, you’re exactly right. Consignment inventory is when a consigner (vendor or wholesaler) agrees to give a consignee (retailer) their goods without the consignee paying for the inventory upfront. The consigner offering the inventory still owns the goods, and the consignee pays for them only when they sell. Perpetual inventory management.Perpetual inventory management is simply counting inventory as soon as it arrives to deliver real-time insights. It’s the most basic type of inventory management system and can be recorded manually on pen and paper or an Excel spreadsheet. Or, by using handheld devices that scan product barcodes and RFID tags, you may use an inventory system that automates inventory balances as soon as stock is moved, sold, used or discarded. Dropshipping.Dropshipping is an order fulfillment method in which the supplier ships products directly to the customer. When a store makes a sale, instead of picking the item from their own inventory, they purchase the item from a third party and have it shipped to the consumer. Lean Manufacturing.Lean manufacturing is a broad set of management practices that can be applied to any business practice. Its goal is to improve efficiency by eliminating waste and any non-value-adding activities from daily business. Six Sigma.Six Sigma is a method that gives companies tools to improve the performance of their business (increase profits) and decrease excess inventory. Lean Six Sigma.Lean Six Sigma enhances the tools of Six Sigma, but instead focuses more on increasing word standardization and the flow of business. Demand forecasting.Demand forecasting is based on historical sales data to forecast customer demand. Essentially, it’s an estimate of the goods and services a company expects customers to purchase in the future. Cross-docking.Cross-docking is a technique whereby a supplier truck unloads materials directly into outbound trucks to create a JIT shipping process. This essentially eliminates warehousing, and there is little to no storage in between deliveries. Bulk shipments.Bulk shipments is a cost efficient method of shipping in which a business palletizes inventory to ship more at once. To see some examples of effective inventory management in action, check out our BigCommerce Case Studies page, where you can find success stories from both B2C and B2B merchants. What is it called when you keep track of inventory?Inventory management is the part of supply chain management that aims to always have the right products in the right quantity for sale, at the right time.
What is warehouse stock movement?Stock Movement in any warehouse is a very common thing. Stock Transfer is the act of moving goods from one part of the distribution chain to another. Storage involves proper management to preserve goods from the time of thier actual production or purchase till actual use.
What are the methods of tracking inventory?Small businesses often use a stock book, or log book, to keep track of inventory. The number of inventory items is listed in one column in the book, and sales are written in another column. This allows managers to keep track of how many items have been sold. This can also be done on computer.
What are the 4 types of inventory management?The 4 Types of Inventory Management
The types of inventory management are Raw Materials, Works-In-Process, Maintenance, Repair and Operations or MRO and Finished Goods.
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