Did you know that you could increase sales, reduce costs, improve your cash flow and increase your employee productivity by having a good inventory control system? Companies large and small make the mistake of thinking that software is the solution to all of their inventory problems, but I believe it is just one part of improving your inventory control.

The best inventory management software on the market can not help you unless you organize your inventory and storage area, get employees involved and create partnerships with your customers and suppliers. Once you have all of this in place then it is time to get your software and perform automatic cycle counts or physical inventory, then look into some tools to add on to your software like EDI and barcoding.

1. Organize your inventory.
   Define what you have in inventory. Record information about your items including product number, description, sales, location and quantity. Be sure to list any special needs the product has. There is a form located at www.inventoryu.com/invform.htm you can use to record your items.
2. Set your minimum and maximum quantities for each item.
   Calculate how much of the product you want to keep on hand for each item. Record minimum and maximum values on the form.
3. Organize your storage space.
   Mark all storage locations. Avoid clutter, use shelves and bins. Use fixed locations for similar items.
4. Get employees involved.
   This is one of the most important steps. Without employees assistance you may never be able to improve your inventory accuracy. Promote teamwork
5. Create partnerships with customers.
   It is very helpful to know what the demand will be for your products. You can reduce inventory levels and provide better customer service.
6. Create partnerships with suppliers.
   Keeping in touch with your suppliers can avoid running out of inventory. Keep up with the lead time from your suppliers, have them notify you if there is an increase or decrease in lead time on any item you purchase from them.
7. Use software to track your items.
   Purchase a software program that can manage your inventory. Make sure it lets you perform physical inventory, shipping and receiving functions. If you have any special needs for your items it should be able to handle them in the software you purchase.
8. Perform cycle counts.
   Every month, pick a few products each day to reconcile with your inventory records. If you stick to this there will be no need for the dreaded physical inventory.
9. Use barcoding.
   Barcoding can reduce the inventory data entry errors and save you time.
10. Use electronic data interchange (EDI).
    If you receive advance shipment notices from your suppliers and purchase orders from your customers, this can cut down on errors. This is can be expensive to get into, but in the long run you could save money. It can be considered an optional step.

    If you follow the steps outlined above, you should see big improvements in your business! So if you want to improve cash flow, increase profits and reduce costs get started now

    Phyllis Davis-Minik at http://www.inventoryu.com, is dedicated to helping your businesses improve inventory accuracy resulting in increased cash flow and reduced expenses by providing you with education, software and other tools.
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