Whether it’s in your personal life or work, efficient time and space management is the key to success. The capability to optimize your use of time and space becomes even more crucial when you’re running a business like a grocery where a great deal of profit is at stake.
Any business manager puts organization and efficiency at the forefront of backend operations and business processes. When running grocery stores, inventory management is key to having a smooth and successful retail establishment.
What is Grocery Inventory Management?
But first, what is inventory management? It's simply ensuring your store carries the merchandise your shoppers are looking for. By employing effective strategies in handling and managing inventory, grocery stores can meet customer demands without running out of stock or wasting stock. It also urges grocers to pay attention to other issues that could potentially arise in their store, such as food safety risks. Food safety and inventory management go hand in hand, and both should be a priority in grocery stores.
Inventory management is a serious part of running a successful retail business. Without proper supervision and keen attention to inventory, it could affect your employees heavily- worse, affecting your customers' experience. The storerooms, shelves, and aisles can only accommodate so many products, and grocery workers can only update prices and merchandise as quickly as they can process new items.
Without good strategies and a smart POS to manage your inventory, grocery store inventory is a pain to handle. Check out this list of new habits you can practice to manage your grocery's inventory better, so it is manageable to track them all.
New Habits For Better Grocery Inventory Management
You cannot overlook the effect of poor inventory management. It can quickly diminish your supermarket’s profitability and thus, badly affect your bottom line. In addition, it can also ruin your customers’ shopping experience with your business. But, with the right system for your inventory, it can leverage your business towards greater success. The most successful grocery stores that have managed their inventory efficiently enjoy increased profit margins, prevent spoilage and obsolescence, and simplified operations as they continuously grow.
So, we’ve compiled some tips and habits that have helped supermarkets succeed. The most successful grocery chains have implemented these four strategies and thus, will help you advance your grocery business.
1. Outline Goals & Priorities
The first step to managing inventory effectively is determining your goals and priorities. Is your goal to save money? Do you want to lessen more wastage of products? Do you want to always have stocks and never run out during a sale? Is your goal to reduce some manual processes and automate more operations? Or, maybe it’s to be a leader in digital supply chain management. Once you can outline your goals, you can start building a plan that will ultimately target specific parts of your teams and operations to achieve that objective.
Making a plan is your blueprint to success. Having a set goal in mind is only the first step. Next, decide whether or not your goal is short, medium or long-term. By pinpointing this, you’ll be able to determine roughly how long it will take to achieve that objective and the steps you need to take to get there.
With these goals and a game plan set in place, it’s essential to ensure that daily routines are being followed thoroughly. Staying on top of little details, such as managing shifts, can make a difference.
Utilizing inventory management tools can make handling behind-the-scenes tasks more straightforward with the help of automating the steps to reach your inventory management goals.
2. Know Your Shelves
You must know your shelves like the back of your hand when it comes to storing and stocking products. One thing you must always do, is to pay attention to product shelf life when making orders. Usually, supermarket retailers and their suppliers have contracts that state an agreed minimum shelf life when the products are delivered. However, it’s important to remember that sell-by dates vary from delivery to delivery. Incorporating shelf life expectations and dates into your inventory management is critical.
Monitoring the shelf life of products will not only streamline inventory management, but it’ll also reduce any food safety risks for customers and employees. Implementing tools such as a remote temperature monitoring system ensures that inventory stays fresh. Digitizing this process allows more time and attention to be paid to other areas that may be less efficient.
Another aspect of shelving products that can be tedious is product labels. Traditional shelf labels are time-consuming, from printing, cutting, and hanging everything manually. Many operations within supermarkets have gone digital, so why not labels? Prices for many perishable items are constantly changing. With electronic shelf labels, workers can update those prices with the click of a button, streamlining the traditional manual processes.
Electronic shelf labels are cost effective as well. With the ability to price match in real-time, you can keep track of your competitors and have a more effective plan to undercut them. A strategic deployment of digitizing labels and paying close attention to shelf life will guarantee better inventory management.
3. Control What Comes Through Your Back Door
Securing and covering any inventory gaps on the sales floor is only part of the work. Backend operations are just as crucial to successful management. There have been many cases where managers need help holding suppliers accountable because of legacy business practices surrounding receiving.
Many grocery stores have started taking on a system called Purchase orders. It is a part of a POS ‘Advanced inventory management’ option. It allows you to create and save orders for the supply of products, send orders to suppliers, receive products, and save suppliers’ information in the system. You can set the ‘Purchase order date to the date you want the order to be put in. You can also set the date you expect your order to arrive in the ‘Expected on’ field and make notes for your order in the ‘Notes’ field.
You can download a CSV of the received supplies and double-check against the original purchase order.
Closing the purchase order-invoice gap is crucial to proper inventory management. Implementing an efficient purchase order system emphasizes how vital it is to buy from vendors at the right time and in the right quantities. That way, it will help your business sell products for more profit and more efficiency.
You can learn more about Loyverse POS Purchase Order system here.
4. Understand Your Products
Of course, you should know your products very well. After all, they’re the main part of your business and what brings in profit from customers. It’s necessary to manage your products individually, but also to know how they move in groups as well.
With many of these items, you should identify “must-haves” within the category of the goods. Take milk, for example. It’s normal to note that “better” quality milk may run out by the end of a business day, but there must always be stock in all basic categories, like low-fat milk. Figure out what other products in your store also fall into these different categories and optimize for them.
A POS with a smart inventory management system can quickly help you determine which products are moving fast and giving you the most profit. It offers a comprehensive item report that can help you make sound business decisions in having a good hold of your inventory.
Managing Grocery Inventory with Advanced Inventory Management
Advanced inventory management includes a set of additional functions in your POS Back Office that allows you to efficiently keep track of items in stock, monitor any inventory changes, and launch a mechanism for more accurate calculation of business profitability indicators.
The ‘Inventory management’ menu includes:
- Purchase orders - allow you to create and save orders for the supply of products, send orders to suppliers, receive products, and save information of suppliers in the system.
- Transfer Orders - allow multiple store owners to distribute items correctly between their stores.
- Stock Adjustments - allows you to modify the stock of items and indicate the reason for that adjustment.
- Inventory history - allows the user to view records of all the changes made in the inventory, including transfers, purchase orders, and adjustments.
- Inventory Valuation Report - gives an understanding of the total cost of the inventory and potential profits from their sale.
- Inventory Counts - allows you to reconcile the expected and actual inventory for all or selected items, see the amount of inventory loss or surplus inventory, and keep documents for each inventory.
- Print Labels - this button will appear in the Items list as a part of the Advanced inventory management. The label can contain the item’s name, SKU, price, and barcode. Labels with a barcode allow you to use the scanner to add items to the ticket.
- Productions - allows you to keep a record of the inventory of produced items, not just their components. It can be useful for items that are made in advance, not during ordering. For example, in a grocery, you can move produced items between stores using inventory adjustments and counts.
Keep your stock count always in real-time, sell your products on the fly, provide your regular customers the best service, analyze your sales to minimize costs with a smart POS with a built-in Inventory Management. Learn more about this here.
Inventory management is not something to be overlooked in your business. In any retail establishment, having proper control over your inventory and staying consistently knowledgeable on what products you’re carrying or missing is the key to running a successful business. Not only will it increase customer satisfaction, it will also decrease inventory costs for your company. Taking the appropriate steps to achieve a thorough inventory is worth it in the long run.
Edited by Chooli