If we want to improve the business’ efficiency and save money, good inventory management practices can help you have the right stock at the right time, improving your bottom line.

The inventory is made up of all of the items you use to produce your product or service. For manufacturing businesses this includes raw materials, in-progress goods, and finished products. For retail and wholesale businesses, your inventory will contain the items you sell to customers.

Effectively managing the inventory can help you:

• Improve your cash flow
• Make purchasing decisions
• Recognize sales patterns
• Establish forecasts
• Set benchmarks

Carrying too little inventory could drive away customers. Conversely, keeping too much inventory on hand will cost you money. Implementing just-in-time inventory management practices may help your business achieve that important balance. Just-in-time suppliers deliver stock as it’s needed. However, successful implementation of just-in-time strategies requires accurate monitoring and prediction of customer demand.

A good inventory turnover ls a key factor in reducing costs and increasing profits. Offering special discounts and promotions can help you increase inventory turnover.keeping track of your inventory will help you identify best-selling items as well as unprofitable products

External Link: http://www.canadabusiness.ca/eng/blog/entry/3549/