New Inventory Management Techniques Can Reduce Costs at Large Retailers

The retail industry has unique needs inventory management needs. Large retailers offer consumers a variety of products and need space for both display and warehousing. A common problem is being able to manage inventory effectively while remaining competitive.There are a variety of inventory management techniques that are vital to keeping retailers profitable. These include ordering, shipping, receiving, tracking, product turn over, and storage. Lack of a good system can inadvertently cause inventory shrinkage, causing the retailer to lose money.Good inventory management techniques include using an open source inventory management system to track inventory throughout the entire retail process. When choosing a system, retailers should look for one that can track and manage all inventories, regardless of what the inventory is. Clothing and sporting goods should be tracked as easily as diapers and laundry detergent. By utilizing UPC and SKU coding, open source inventory management can assist the retailer by tracking a product through the entire management chain and allow them to make decisions regarding the future of the product in a particular store or region.To maximize the benefits of inventory management, retailers must know how the products are selling. Sales reports must be reviewed to evaluate how well products are selling and to aid in decision making regarding sales promotions or permanent markdowns on the merchandise. These reports also allow retailers to analyze the data with regard to their sales position in comparison to their competition. Finally, the software should accurately review inventory, eliminating time consuming manual counts.Non-existent excess inventory, or inventory shrinkage, occurs due to theft, damage, or manual miscounts. The use of the inventory tracking systems mentioned above can help in eliminating manual miscounts. It can also alert management to possible theft issues, whether by consumers or staff. Damaged or returned merchandise must be scanned back into the system to accurately account for its return into stock so it can be accounted for properly.The new open source software allows management to access inventory from anywhere. This is particularly beneficial when a retailer is scattered throughout a region and utilizes a central warehouse. Buyers can access sales reports and order the appropriate inventory for each store, rather than buying the same merchandise for every store in the same amounts and hoping it sells. This promotes a healthy bottom line since the store is stocking what its customers are buying, not what the retailer wants to sell.As retailing becomes more technologically advance, retailers must take advantage of the inventory management tools to remain profitable.