Every business has room for improvement and this includes the management of your parts inventory. The storage and management of tools and parts become a challenge if you are condensing your products in a small space or if there is a need to keep track of your items.
With the right measures in place, your business can make the most of your existing inventory and ease movement within your warehouse.The right inventory control solutions will also get rid of extra items that bring little value to your business.
From following the 80/20 rule to investing in quality storage, here’s how you improve the management of your tool and parts inventory.
Apply the Pareto Principle
The Pareto Principle, otherwise known as the 80/20 Rule, holds that approximately 80 per cent of your total consumption value is based only on 20 percent of your items. The principle recommends that you focus on solutions that favour your most marketable items for better inventory control and higher revenue.
Applying the Pareto Principle for better inventory management will require you to use a control technique called the ABC Analysis. Compute for your annual consumption value by multiplying your annual demand with the item cost per unit.The results will determine how to sort your inventory items into three distinct categories:
- The “A” inventory contains items that have the highest annual consumption value but account for only 10 to 20 per cent of your inventory items. Implement tighter inventory control on these items to avoid stock-outs.
- The “B” inventory contains inter class items that account for approximately 15 to 25 per cent of your annual consumption value but comprise 50 per cent of your inventory. Determine the potential evolution of these items into A-items and prepare for their devaluation into C-items.
- The “C” inventory contains items that have the lowest annual consumption value but account for at least 50 per cent of your inventory items. Re-strategise your ordering technique for these items to lower the risk of excessive inventory costs. Stock-outs of these items are acceptable and will not harm your revenue.
Invest in an Inventory Management App
Technology has made it possible for anyone to do virtually anything. Your business has the opportunity to improve efficiency and enhance productivity when you adopt innovative solutions.
When you utilise an inventory app for the management of your parts, you lessen your dependence on physical paperwork which optimises and organises your process.Searching for specific items becomes easier and less time-consuming because all of your files are in one secure space.
However, apps come with a cost. Before you adopt this solution,decide whether it is a cost-effective move for your business.
Maximise Your Storage Options Within Your Warehouse
You can’t go wrong with a clean layout for your inventory. An efficient layout allows an easy flow of traffic and smooth movement while minimising safety hazards. This is the simplest way to maximise your storage and optimise your employees’ productivity on the floor.
Make sure that your storage is labelled properly and arrange your tools and parts in a logical manner to prevent confusion. Stock your inventory based on your store’s needs in order to eliminate surplus and clutter; this is where your ABC Analysis results become helpful.
Investing in high-density storage goes a long way in keeping your tool and parts inventory in tip-top shape. These storage spaces serve to maximise limited space in your warehouse and increase the functionality of your workbenches. A good storage system also helps you monitor your tools and parts for easy and timely replenishment. These will improve the overall efficiency of your operations and optimise your inventory control.
Manage Your Tools & Parts Inventory with Hi-Density Storage
Containit Solutions is a leading supplier of high-density storage in Australia. We provide storage solutions for your parts store, workshop and warehouse. We cater to your inventory management needs with efficient and high-quality storage solutions.