Inventory shrinkage is something that retail companies are wary of. It can be caused by several factors such as theft, damages, spoilage or administrative errors on stock movements. In order for you to prevent inventory shrinkage, you need proper inventory management strategies. Here are six ways you can implement to keep your inventory safe.
1. Find the Right Person to Manage Your Inventory
Choose one of your staff to act as an inventory manager. The person responsible for your inventory must really understand the ins and outs of inventory management. They should be able to provide in-depth inventory reports, which include the stock quantity, incoming and outgoing stocks, depreciation, stock valuation, and so on. The inventory manager is also responsible for handling inventory audits, purchase orders, and so forth.
2. Optimize Your Warehouse & Store Security
One of the most effective ways to prevent inventory shrinkage is improving security in your warehouse and store. Security improvement is crucial especially if you have a large store which holds large amounts of stocks. Install CCTV cameras around your warehouse and store corridors. Use a digital door lock and provide access to the warehouse just for those responsible for the inventory.
3.Create a Barcode & SKU Number for Each Item
Barcodes and SKU numbers on your items are very helpful for inventory tracking. Labeling your items helps ensure all items are well recorded, thus avoiding inventory loss. To make it easier for you to track your inventory and generate barcodes, consider using a barcode system that is integrable with barcode scanners and an inventory management system.
4. Keep Track of Your Inventory Levels
Monitoring inventory levels periodically can help you reduce inventory shrinkage. Set the minimum level of your inventory. If the number is close to the minimum level, that means you must reorder immediately. Make sure you don’t order too many items since storing excess inventory can lead to damage, decay, obsolescence, and more issues. Therefore, we highly recommend that you conduct inventory forecasting to help you determine the right amount of purchases.
5. Conduct Regular Inventory Audit Procedures
You should never forget inventory audits on your agenda. Compare the number of stocks available in physical locations such as in the warehouse or store with the number of stocks recorded in your accounting system. This method is also called stocktaking. Make sure there are no differences between the physical inventory count and the accounting records. There’s no specific time to undertake inventory audits, so you can do the procedures whenever necessary.
6. Prevent Inventory Shrinkage by Automating Your Inventory Management
There is no more effective way to prevent inventory shrinkage than automating your inventory management. Manual inventory tracking is very inefficient. For best results, we strongly recommend that you use inventory management software. It helps you keep track of your inventory levels, speed up purchasing process, control procurements, generate real-time inventory reports, and many more. Choosing inventory management software that is integrable with barcode scanners will help you accelerate the inventory tracking.