Expert Inventory Management Tips for SMEs

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Knowing the balance between buying too much and not having enough is one of the first hurdles that small business people encounter. However, it is critical to keep your inventory well-stocked to avoid problems like lost sales or having out-of-stock items. When you buy too little, you lose money because you can’t produce what customers need; when you buy too much, you lose money because you carry the inventory until it goes bad or becomes obsolete. The key to getting this balance right is proper inventory management. Here are the expert inventory management tips for SMEs.

Lot Tracking and Traceability Software

Tracking down lost inventory can become a huge issue for SMEs. With the help of manufacturing traceability software, companies are able to track production runs more easily. The software helps them create ‘lots’ specific for their products so that they can ensure quality control during manufacture. Lot tracking also helps firms in cases of recalls where they can easily find and recover the affected items.

Lot tracking and traceability software also play a key role in reducing errors and wastage in manufacturing processes. Since the system makes it possible to monitor all aspects of inventory management, it leads to better utilization of resources. The software enables companies to analyze patterns like maximum usage time, wear and tear rate, etc. These in turn help them in making informed decisions to optimize usage of resources and reduce waste. Lot tracking also makes it possible to oversee the entire process of procurement, manufacture, packaging, and delivery. This not only helps companies cut costs but also identifies potential issues in the system that may affect production levels or quality standards.

Use Purchase Orders

Small businesses may opt to use purchase orders as a means of inventory management. While this works well for larger companies with dedicated buyers, it is not ideal for small businesses. The downside to using purchase orders is that they must be issued before receiving products from the supplier. When suppliers are located far away, this creates an opportunity for items to go out of stock. However, when the supplier is local and stock moves slowly, purchase orders ease the tracking of products in and out of the warehouse. In this case, micro-businesses can use a hybrid system by issuing purchase orders for high-value items to be paid upon delivery.

Expert Inventory Management Tips

Focus on Quality Control

Quality control is all about maximizing customer satisfaction. It ensures that the finished product fulfills the promises made to customers, including the company’s claims in its advertisements or other public communications. Quality control is mostly about testing. However, this does not mean that you have to pour all the resources into just getting your product tested by some third-party agency for quality analysis. Your responsibility as a manufacturer is to ensure that your products meet various criteria of standardization set out in your industry. To do so effectively, you should test your product yourself, following the guidelines mentioned in various standards. Through proper quality control, you can be sure that your products do not include any defects or faults that could lead to injuries or accidents for human beings using them.

To assure the quality of your production, just take a part of one item produced at random sometime during each production run. This can be done through sampling, which is simple enough to do in an industry where the item manufactured is not too big. If your product fails the quality standards under test, stop the line immediately and fix whatever was wrong with it before allowing it to be used again during production.

Inventory management is a complicated matter for small and medium-sized enterprises with little room to maneuver in terms of storage space. However, there are several inventory management tips that SMEs can keep in mind when trying to keep their stock levels under control whilst avoiding wasteful spending.


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