The most efficient way for SMEs to do Inventory Planning

One of the tricky elements of operating a business in that moves product is inventory planning. Whether you’re an SME managing a lot of stock or just a little, having control over your inventory is essential to your business’s success.

If you store inventory data in a spreadsheet, you’ll know it can be a real nightmare to keep track of everything on a manual basis and an expensive use of time.

Even if your inventory data is stored in an Inventory Management System (IMS), it won’t give you predictions about how much stock you need to order.

By using inventory and manufacturing software, you can reduce the risk of stock-outs or overstocking.

What is Inventory Control?

Every company aspires to achieve its primary goal, which is likely to be making profit. To make profit, you need to reduce unnecessary expenses. This is why inventory forecasting is crucial, as it helps free up cash that you can redistribute to other parts of your business.

For most SMEs, inventory planning is a guessing game. It’s a balancing act that involves making predictions about consumer demand and supplier reliability. If your inventory is not forecasted correctly, you can easily end up with too much of it, or none at all.

Wrong calculations here can result in some damaging consequences, including sending your customers looking elsewhere and undoing all the great work you’re doing in other parts of your business.
How to avoid inventory planning issues

Human errors are great contributors to inconsistencies in inventory counts. If you’re currently using spreadsheets or other manual methods to forecast your stock, you may end up wasting your valuable time by going through the paper and correcting mistakes one after the other.

According to Forbes, about 9 of every 10 spreadsheets contain errors. Inaccuracies from this method can become serious problems. Overstocking can become a nightmare if not properly managed because it reduces your cash flow and clogs up limited storage space. Most companies have about 50% of their working capital tied to inventories. It can be challenging to reduce your inventory, but it is important if you want to have cashflow and liquidity in your business.
Another issue is the lack of accurate data to recognize your evergreen products, sales trends, or customer behaviour, leading to an improper inventory forecast.

Smart tools like StockTrim exist to help SME owners.

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