Wednesday, August 13, 2008

Effective inventory management -more tips

Following items are almost sure to sell.
New Items with a Firm Customer Commitment – that is, a signed customer purchase order to buy the entire quantity that you must bring into inventory. Yes, there is a chance that the customer will go out of business, cancel the order, or return the material for credit, but most customers who are willing to sign a purchase order are intent on using the product.

Non-Stock Products with Recurring Sales. These are non-stock products that are continually sold to one or more customers. After you've ordered them several times in one year to fill existing customer orders, you may decide that it would be more economical for you, and more convenient for your customer, to keep several pieces in stock.

To reduce the chance of these items becoming dead inventory, sales should be analyzed at least twice a year to ensure that your customers are continuing to buy these products. If you notice a drop in usage one month, immediately contact the customer to determine the reason for the decrease in demand. Perhaps they are experiencing a temporary drop in usage – or, for some reason they've determined that your service is unsatisfactory, or their needs have changed. Quickly identifying the reason for the decrease in sales allows you to fix the problem or to liquidate your remaining inventory before it becomes dead stock.
There is a greater chance that these new stock items will eventually become dead inventory. Salesperson and customer "suggestions" represent the most common type of moderate risk item.
To reduce the chance of these items becoming dead inventory, you must continually remind the salespeople of the sales and current stock position of all new stock items. Print and distribute a report containing the following new product information to each salesperson each week, or at a minimum each month, until the product has been in inventory for five to six months:

* Product number and description.
* Current month sales (in units).
* Sales projection for the current month (provided by the salesperson before the item was added to inventory).
* Total sales (in units) of the item to date.
* Total sales projection to date (provided by the salesperson before the item was added to inventory).
* Current on-hand quantity.
* Manually set minimum stock level of the item.
* Manually set maximum stock level of the item.
* Name of salesperson who requested that the item be stocked.
* Reason why the item was added to stock.Note that because we don't have enough usage history to accurately forecast future demand of new products, they are normally maintained with manually set minimum and maximum stock quantities

No comments: