Inventory management is a key element of retail, and good inventory management results in more sales due to better availability. Some of the key elements of inventory management include:
A physical inventory is a time-consuming process, labor-intensive, and costly. It requires employees to take time out from their regular duties, often at overtime pay, and because it is a manual process it is naturally prone to error. In fact, the physical inventory is rapidly becoming obsolete and unnecessary due to advanced POS and inventory management software systems. The big downside of relying on physical inventory of course, is that it provides a reporting of your inventory at one single point in time—and it can quickly get out of date. An automated inventory system that is tied to the point of sale in real time will provide more accurate reporting that is up-to-date at any given moment.
Generally speaking, as more work is done on the back end, less work needs to be done on the front end. The advantage of this approach of course, is reduced errors. In addition to greater accuracy, you’ll also get better reporting, especially if you have taken the time to create an accurate set of categories. In addition to tracking individual items, you can improve your reporting by putting items into broad categories, like menswear, shoes, hardware, etc., and this can be used by the reporting module of your POS solution so that you can better track not only sales of individual products, but product categories as well.
Using categories in your POS system and in your back-end inventory system will also lead to better physical inventory management. Storage and picking are the most labor-intensive parts of inventory, and arranging your stock so that it can be more easily picked will save time and warehouse expense—and may also even cut down on the amount of warehouse space you need.