In the hire and rental industry, your inventory management is everything.
As an SME, you probably have a lot of capital invested in inventory. And while it might be one of your primary sources of income, it can tie up a lot of money if your management systems are not fully functional.
In fact, proper inventory management is one of the keys to a successful business. Managing inventory decreases costs and increases your sales, which is, undoubtedly, what we all want.
If you’ve been in the hire and rental business for a while, you’ve probably heard of cloud-based software. Cloud software is a cost-effective alternative to legacy systems and offers everything a business needs to hit the ground running.
But one thing is for sure; if you don’t follow the best practices, you might not reap the benefits.
Stay with us! Today, we will show the best inventory management practices you have to follow to lead a successful hire and rental company.
Keep An Eye On Your Inventory
If you have an e-commerce or a brick and mortar store, you might have realised that keeping your inventory levels in sync can be a hard task.
For instance, you don’t want your clients to think you have an item in stock only for them to find out at the checkout that it’s sold out.
That’s why good inventory management starts with you understanding your inventory and its relationship with your business and its operations.
A good idea would be to have a clear knowledge of your types of inventory and identify how your business can optimize your inventory management.
To identify your inventory needs, your business can use a technique known as ABC analysis that provides a mechanism for you to identify and categorize each item separately.
Automate Your Inventory Management
Let’s be honest: Excel spreadsheets and manual inventory management are a thing of the past. They are labor intensive, painful to use, and outdated.
Sure, you can probably run your business on Excel spreadsheets, but if you want to get serious in your rent and hire company, you need a cloud-based inventory management system.
Why torture yourself when there is a cheaper alternative out there?
Automation is now possible using rental management systems. You can automate many different areas such as maintaining accurate stock counts, low and high stock alerts and automating workflows.
You can even use hybrid warehousing, which enables you to use third-party warehouses that can help you deliver and track your goods across platforms with reduced costs of holding and infrastructure.
Forecast The Inventory Demand
One of the most important things for a hire and rental business is the capacity of forecasting. When you and your staff can predict your business inventory requirements, you gain control over your operations and can even anticipate your customers’ demands.
Many retailers get into trouble with this particular problem, especially because companies often lose sight of their stock, which ends up costing them money and resources.
Your forecast capacity should factor into historical sales trends, seasonality, and economic climate. In a nutshell, you need to stay on top of both your stock and your client’s needs, so you don’t hold either an excess or insufficient inventory to minimize the financial impact on your business.
A good rule of thumb is never to stock more than 1.5 times your turn rate during a delivery cycle.
Always Look For Underlying Inventory Problems
Last, but not least, always look for the underlying problems.
One of the best things about cloud-based rental management systems is that they offer you accurate reports, which help you analyse problems with your inventory.
A cloud-based system can help you track your workflows and identify weaknesses in the process, enabling corrective action to be taken to fix the underlying issues in your inventory management.
That way, when you have to make business decisions, you can be entirely informed about both your performance and your problems so you can play your strengths and minimize your losses.
Final Thoughts
Your inventory is the life and blood of your hire and rental business. For that reason, you need to keep a close eye on it to prevent problems and increase your bottom line.
In other words, take a minute to analyse your business and the way you manage your inventory and its relationship with your operations.
Let’s rewind for a minute:
- Identify the potential issues in your inventory management systems
- Try to prevent your inventory needs and try to keep a healthy amount of stock in your store
- Automate your inventory management as much as you can