The best systems of inventory management all contain a particular series of criteria that make them both efficient and worthwhile. When one considers that improvement of your inventory management system by as much as 15% can affect your profit margin by over 30% minimum, an intelligent structure and “practice” of sound policies should be the least that you do.
The criteria are as follows:
Systematic Inventory Updates–
Operation of proper perpetual inventory system should be used so that it is possible to determine at any time the amount and value of each kind of materials in stock. It also enables the comparison of book inventory with the result of physical counting.
Control of Stock Areas and and Sales of Product –
The proper operation of a system of stores control and issue is introduced so that there will be delivery of materials upon requisitions to departments in the right amount at the time they are needed.
Checks and Balances –
The operation of internal check should be introduced to ensure that transactions involving materials and equipment are checked by reliable and independent officials.
Establishment of Controlling Accounts and Subsidiary Records –
Controlling accounts and subsidiary records reveal summary of detailed materials costs at each stage of materials receipt and consumption from the storeroom to finished goods.
Regular Reports –
Regular reports and information should be provided for the management in connection with the purchase of materials, issues from stock, inventory balances, obsolete stock, goods returned to vendors, and spoiled of defective units.
Standards or Level to be Fixed –
A minimum quantity of each item of materials, below which point the inventory is not allowed to drop, and a maximum quantity, above which stock is not carried should be fixed. In the same manner ordering level and economic order quantity may be determined.
If you are planning to consider a modern and feature-rich software application to manage your stock, please review the above sections and devise what you need, then visit www. simmssoftware.com or email email@example.com to get help with taking your first cohesive steps toward increasing your business success.