Inventory turnover is one of the many measures of a company’s productivity. The accountable manager must closely and effectively oversee this because it is directly tied to the expenditures and investments of the company.
The average time it takes for your organization to sell the stock it has on hand or the time it takes to replace its inventory, is known as inventory turnover.
It is not ideal for these things to sit around unutilized for an extended period of time because each item acquired represents an investment of funds made by your organization. It is a value after all, and values can be used for other purposes.
Additionally, there are both direct and indirect expenses associated with keeping a stock of goods, such as labor, property, inventory, upkeep, and maintenance. In this way, it is constantly difficult to strike the right balance between never having a product deficit and having items accumulate.
The most effective technique to enhance inventory turnover is through data and knowledge. Understanding your store’s sales frequency, product rotation schedule, seasonality of business, and supplier delivery times is crucial to this process.
We’ll provide you with some tips in this article on how to increase the inventory turnover at your business. Have a good read!
As we previously stated, data and knowledge are the best methods to enhance this indicator. With these estimates at hand, it is possible to keep an eye on things and create buying plans that work better.
It is advised to concentrate on the items that account for 80% of your company’s revenue and drive the majority of its sales.
You should research whether it would be better to stop selling some products or run a promotion for items with lower turnover and order participation.
In order to avoid losing sales and/or delaying delivery, it is advised to keep a stock size that is merely sufficient. Stopped items imply losses.
An excess of inventory makes it easier for perishable commodities to be lost, damaged, or reach their expiration date as well as necessitates more money and time for upkeep.
Directly negotiating with your suppliers on the supply and delivery of goods is one of the tactics. In other instances, the product is delivered and/or stored directly by the supplier.
3. Sales and Training
Low inventory turnover may frequently be increased with training and more concentration from salespeople. Instead of researching and getting to know the products that are least in demand, they frequently focus more on the ones that make up the majority of their sales.
When this aspect is addressed, sales of things that take a while to release typically rise. Another tactic is to use targeted initiatives and seller promotions to boost the sale of slow-moving goods.
By putting these suggestions into action, you will undoubtedly increase inventory turnover, which will boost productivity for your business, create more room for new products, and lower storage costs.
Would you like to learn more ways to raise the efficiency of your business? Get more information about the logistics solutions for your goods by contacting 3PL Links right away.