Retail Checks & Balances

The Inventory Jigsaw - Putting Pieces in the Right Places

January 07, 2024 Kevin Spencer Episode 11
The Inventory Jigsaw - Putting Pieces in the Right Places
Retail Checks & Balances
More Info
Retail Checks & Balances
The Inventory Jigsaw - Putting Pieces in the Right Places
Jan 07, 2024 Episode 11
Kevin Spencer

In episode 11 of Retail Checks and Balances, Kevin Spencer explores the importance of effective inventory management for businesses. He discusses how inventory management helps avoid overstock, improves cash flow, enhances customer satisfaction, and provides valuable insights for strategic decision-making. Kevin also addresses the common challenges businesses face, such as inaccurate forecasting, and provides insights on how to overcome them. 


Tune in to learn how to optimize your inventory processes and ensure the success of your business.


TIMESTAMPS

[00:02:30] Common Inventory Management Challenges.

[00:08:03] Prioritizing Inventory Management.


In this episode, Kevin Spencer emphasizes that effective inventory management is crucial for the success of a business as it offers several benefits. It helps prevent overstocking, which can tie up valuable resources and capital, while also improving cash flow, which is essential for financial stability and growth. Thus, it enhances customer satisfaction by ensuring products are readily available and delivered on time. It also provides valuable insights for strategic decision-making, allowing businesses to make informed choices about product offerings, pricing, and marketing strategies.


In addition, Kevin highlights the importance of understanding the value of inventory for insurance purposes. Accurate reporting of inventory is necessary for producing an insurance claim in case of any unfortunate events or damages to the business. By having a clear understanding of the value of their inventory, businesses can ensure they are adequately covered and can recover their losses in case of any unforeseen circumstances.


QUOTES

  • “The most important thing is to invest in training your people. And if you do that, it can help address some challenges.”
  • “Technology has transformed the way businesses manage their inventory. Technologies like automation artificial intelligence and data analytics are going to contribute to more efficient inventory management. Automation reduces manual errors and speeds up processes.”
  • “Building strong ties with your suppliers and conducting regular audits are vital for a well-oiled inventory management machine.”



SOCIAL MEDIA LINKS


Kevin Spencer

Instagram: https://www.instagram.com/kspencer007/

LinkedIn: https://www.linkedin.com/in/kevinspencer007/



WEBSITE


Rod Plus Solutions: https://rodplussolutions.com/



Show Notes Transcript

In episode 11 of Retail Checks and Balances, Kevin Spencer explores the importance of effective inventory management for businesses. He discusses how inventory management helps avoid overstock, improves cash flow, enhances customer satisfaction, and provides valuable insights for strategic decision-making. Kevin also addresses the common challenges businesses face, such as inaccurate forecasting, and provides insights on how to overcome them. 


Tune in to learn how to optimize your inventory processes and ensure the success of your business.


TIMESTAMPS

[00:02:30] Common Inventory Management Challenges.

[00:08:03] Prioritizing Inventory Management.


In this episode, Kevin Spencer emphasizes that effective inventory management is crucial for the success of a business as it offers several benefits. It helps prevent overstocking, which can tie up valuable resources and capital, while also improving cash flow, which is essential for financial stability and growth. Thus, it enhances customer satisfaction by ensuring products are readily available and delivered on time. It also provides valuable insights for strategic decision-making, allowing businesses to make informed choices about product offerings, pricing, and marketing strategies.


In addition, Kevin highlights the importance of understanding the value of inventory for insurance purposes. Accurate reporting of inventory is necessary for producing an insurance claim in case of any unfortunate events or damages to the business. By having a clear understanding of the value of their inventory, businesses can ensure they are adequately covered and can recover their losses in case of any unforeseen circumstances.


QUOTES

  • “The most important thing is to invest in training your people. And if you do that, it can help address some challenges.”
  • “Technology has transformed the way businesses manage their inventory. Technologies like automation artificial intelligence and data analytics are going to contribute to more efficient inventory management. Automation reduces manual errors and speeds up processes.”
  • “Building strong ties with your suppliers and conducting regular audits are vital for a well-oiled inventory management machine.”



SOCIAL MEDIA LINKS


Kevin Spencer

Instagram: https://www.instagram.com/kspencer007/

LinkedIn: https://www.linkedin.com/in/kevinspencer007/



WEBSITE


Rod Plus Solutions: https://rodplussolutions.com/



Intro/Outro00:02 - 00:28
Welcome to Retail Checks and Balances, a podcast that takes you behind the scenes of the bustling world of commerce and culinary delights to help you grow your business and win. Join us as we explore the fascinating stories, trends, and challenges that shape the retail and hospitality industry, from cozy corner cafes to sprawling shopping malls and everything in between. And now, here's your host, Kevin Spencer. 



Kevin Spencer00:31 - 11:50
Welcome, welcome again to Retail Checks and Balances. Today we'll be exploring a critical aspect of business operations, inventory management. You know, whether you're a small business owner or part of a large enterprise, effective inventory management is key to your success. It's like the backbone of your business. I've had a lot of experience in this regard with optimizing inventory processes. So let's kick things off. Let's talk about why inventory management is so crucial for your business. and I can shed some lights on the significance of keeping a tight grip on your inventory. You know, effectively and efficiently managing your inventory is essential for several reasons. It helps avoid overstock and It improves the cash flow. The financial gurus would love that or your accountant per se. It's important to understand as well it enhances customer satisfaction and provides valuable insights for strategic decision making. Many businesses face challenges when it comes to managing their inventory. What are some of the common issues and how can business overcome them? One common challenge is inaccurate forecasting leading to overstock or shortages. For example, some people or your vendors or manufacturers would say, I'm giving you a great deal on buying 100 cases of this particular product. And it might be a great deal on paper, but let's look at it from your sales perspective. From your sales perspective, you might not sell 100 cases in six months. And the decision will have to be Do you want to tab that extra cash by buying 100 cases or stick with your forecast of selling 20 cases a month? You know, so the issues include poor tracking system, manual errors, and a lack of communication between departments. implementing some advanced technologies, if you would like, a barcoding system, or, you know, some of us have heard of RFID, which is still, you know, not rampant in the industry per se. But the most important thing is to invest in training your people. And if you do that, it can help address some challenges. You know, there are various inventory management systems available. You know, and there are a lot of popular ones. But the most important thing to understand is what does your business need from a system? Not the other way around. You know, businesses can opt in for, you know, what type of inventory you want to do. Is it periodic? I'm going to check the inventory in different periods, or I'm going to do perpetual inventory, meaning real time as soon as something is sell, I want to be able to run my business that way and do stock counts on a regular basis. But the choice depends on factors like what type of industry you're in, you know, it's a warehouse, is it a supermarket, is it a retail store, and also fundamentally what budget constraints you have. It's crucial to evaluate your specific needs of your business before making a decision. So for example, some people might think it costs me this amount of money to do an inventory count. And it's probably not worth it because we make this amount of money and we can be okay with what the shrinkage is. So the shrinkage is whatever loss we've received in terms of theft by customers or even employees. Technology has transformed the way businesses manage their inventory. Technologies like automation and artificial intelligence and data analytics are going to contribute to more efficient inventory management. Automation reduces manual errors and speeds up processes. AI or some level of reporting can predict demand patterns, while data analytics provides actionable insights. Integrating these technologies into your inventory management system can significantly improve accuracy and efficiency. Let's dive into some best practices. key strategies for your business to adopt to maintain an optimal inventory level. What you should do is regularly review and update inventory levels, establish effective communications channels, implement cycle counting, and prioritize supplier relationships. Additionally, setting up safety stock levels and employing what we call the ABC analysis can further enhance inventory management practices. So where products sit in priority. So that goes back to, you know, you want to know what your top 100 products are and how much of those top 100 products contribute to your sales revenue on a monthly basis or annual basis. So you ensure you understand that and manage your inventory according to that. And going back to understanding what my forecast should be based on my sales or if I I'm going to do marketing to push more of a certain product because the productivity as well as the product profitability, sorry, is what we need to focus on. And that is so important in the prioritization. You know, this may, some people may think this is not a great approach because, you know, inventory is so boring or whatever the case is, you have to close your store or you don't have to close your store, but you have to shut down your operations to get an idea of what that value is or what that value is to the business. And it's important because you need it for insurance purposes, because you need, if God spare your life, if something happens to your business, you want to be able to have accurate reporting to produce a claim for your insurance purposes. And everything is like a choreographed dance, where inventory arrives just in time to meet demand, minimizing access and reducing holding costs. And of course, the most important, let's not forget about this, is human relationships. Building strong ties with your suppliers and conducting regular audits are vital for well-oiled inventory management machine. And what that means, you know, the relationships with your suppliers are are going to be important and critical because you're going to have to let them know, hey, why do I need so much or why do I need this? Are you going to help me promote this to increase sales? So it works hand in hand in terms of that. Do I need much more credit terms because I need to, I need this amount of days to cover to relinquish that inventory if you are giving me a deal. And your finance department will love this because now you're looking at the bottom line of managing a smooth, slow flow of goods. So, you know, the most important thing is to stay in control. The most important thing is to use technology to strategize. And of course, remember that human intuition that needs to be part of this as always with anything in your business. Thank you so much for listening. I mean, I can go on and on for days about inventory management, but there are so much systems in place that can help you. So have a great time with inventory management. God bless you all and keep you safe. 



Intro/Outro11:52 - 12:04
Thanks so much for tuning into this episode. We sure do appreciate it. If you haven't done so already, make sure you're subscribed to the show wherever you consume podcasts, so we'll get updates as new episodes become available. And if you feel so inclined, please leave us a review. Until next time, friends.