The capability to optimize time and space is relevant in many situations. Whether it’s in your personal life or work, time and space management is the bottom line to success. That’s why any business manager values organization and efficiency in back of house operations. When it comes to grocery stores, inventory management is key to running a smooth and successful retail establishment.
So, what exactly is inventory management? Well, it’s the process of making sure your store carries the merchandise that shoppers are looking for. With effective strategies in handling inventory, grocery stores can meet customer demands without running out of stock. It also pushes grocers to pay attention to other issues that may 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 craft when it comes to running a successful retail business. Without proper care and attention to inventory, it could affect customers and employees heavily. The storerooms, shelves, and aisles can only entertain so many products, and grocery workers can only update prices and merchandise as quickly as they can process new items. Grocery store inventory is not easy to handle; considering its broad inventory that includes fresh and short-shelf-life products and also longer lasting frozen goods or packaged items, it’s a handful to be able to track them all.
The effect poor inventory management can have is not something to overlook. It can diminish your supermarket’s profitability and thus hurt your bottom line. It can also provide your customer with a bad shopping experience. But, with the proper system for your inventory, it can push your business towards greater success. Some of the most successful grocery stores that have managed their inventory efficiently have increased their profit margins, prevented spoilage and obsolescence, and simplified operations while facilitating growth.
So, we’ve compiled a couple of tips and habits that have helped supermarkets flourish and succeed that you can use to improve your grocery store inventory management. These four strategies have been implemented by the most successful grocery chains and are sure to help you advance your business.
1. Outline Goals & Priorities
The first step to managing inventory effectively is to define your goals and priorities. Is your goal for your store to save money? Is it to reduce a certain percentage of manual processes and to digitize more operations? Or, maybe it’s to be a leader when it comes to digital supply chain management. Once you’re able to outline the goals that you have, you can start building a plan that will target specific parts of your teams and operations to ultimately achieve that objective.
Making a plan is basically your blueprint to success. Having a set goal in mind is only the first step. Next, you should determine whether or not your goal is short, medium or long-term. By pin-pointing this, you’ll be able to determine roughly how long it will take to achieve that goal, and the steps you need to take to get there.
With these goals and a game plan set in place, it’s important to ensure that daily routines are being thoroughly followed. Staying on top of little details such as managing shifts, can make a world of difference. Utilizing shift management tools, like Squadle’s digital shift management tool, can make handling behind-the-scenes tasks easier.
2. Know Your Shelves
When it comes to storing and stocking products, it’s critical that you know your shelves like the back of your hand. Never overlook product shelf life when making orders. Supermarket retailers and their suppliers have contracts that state an agreed minimum shelf life when delivered. However, it’s important to remember that sell-by dates vary from delivery to delivery. That’s why 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 for more time and attention to be paid to other areas which 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 as well? 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 original 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. Back of house operations are just as important to successful management. There have been many cases where managers have trouble holding vendors accountable because of legacy business practices surrounding receiving.
What many grocery stores have started taking on is a system called direct store delivery. Instead of having human operators to count and check items off during deliveries, a direct store delivery system relies more on digital checks and balances to ensure proper order fulfillment. As soon as products are received, their barcodes are scanned, and the information is immediately sent to your store’s inventory management system. It is then double-checked against the original purchase order.
Closing the purchase order-invoice gap is a very important part of proper inventory management. By implementing a direct store delivery system, it emphasizes how crucial it is to buy from vendors at the right price and in the right quantities. That way, it will help your business sell products for more profit.
4. Understand Your Products
It’s no surprise that you should know your products very thoroughly. 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 behave in groups as well. When it comes to perishable goods, you can often switch out products ready for another one that customer.
With many of these items, you should identify “must-haves” within the category of the goods. Take bread, for example. It’s normal to note that “nicer” quality breads may run out by the end of a work day, but it’s important that there should always be stock in all basic categories, like white sliced bread. Figure out what other products in your store also fall into these different categories and optimize for them.
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.