Controlling the replenishment of the stock and organizing it properly are two fundamental processes to avoid the shortage of products in your petshop and maintain a good variety of goods. After all, receiving customers and seeing them leave due to the lack of certain items makes your business lose opportunities and revenue. You don’t want that to happen, do you?
Therefore, it is essential to implement technological processes and tools that help in stock management. To help you with this, we’ve selected some tips on how to optimize the replacement of materials in your warehouse. Be sure to check them out!
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Adopt an inventory management system
To start, it is important to adopt an inventory management program. This type of solution can be independent or constitute a module of a business management system (such as an ERP).
The advantage of this type of tool is that it has processes mapped based on real stocks and, in the case of a specific one for the pet market, it has features aimed at this sector. In addition to automating processes, it facilitates the work of employees when controlling the entry and exit of materials from stock.
Use stock-oriented performance indicators
It is important to have performance indicators that allow measuring the efficiency of storage processes. For example, losses in inventory, time to replenish products on shelves, inventory turnover, etc.
Even the time when orders must be placed with suppliers to prevent the company from running out of products can be measured. This indicator is called an order point.
Analyze which products come out the most
Do you know which products come out the most in your company and which ones contribute the most to your revenues and profits? If you have difficulty measuring this, there are methods that can help, such as the ABC curve.
In this model, the products that provide the greatest value for the business are classified in group A. Usually, they are found in less quantity in stock, although they can represent the majority of costs and the demand for them is high. Group B items are intermediaries both in the value generated and in the amount stored, demand and costs generated.
Group C products are the majority in stock, representing up to half of the items stored. However, they represent a small part of the costs and contribute a smaller amount to the revenues. Their demand is also low when compared to the others.
By analyzing what else your distributor sells, which items generate the most revenue and which provide the most cost to store properly, you can apply the ABC curve to your business. Thanks to this, you will know which elements need more investment and which products cannot be missing in the company. Cool, huh?
Establish inventory control and replenishment methods
- There are other product replacement control methods that can be useful for your business, such as “First in, first out” (PEPS) and “Last in, first out” (UEPS).
- As the denominations indicate, these systems are used to select which products will be in stock and which will go out first to replace shelves or to deliver to customers.
- PEPS, for example, is useful for products that have a short expiration date, such as perishable pet food. Therefore, those who have been stored the longest are the first to leave. This avoids losses.
- In the UEPS, the base of the cost of the stock that will be used to compose the sale price is that of the last product purchased. In this way, the total stored is calculated according to the most recent acquisition price, which tends to be higher.
- This can generate a higher profit compared to lots previously purchased, as they were purchased for a lower price and will be sold at current prices. They also make it possible to replenish the stock when the old items are sold. If they are traded at the previous lower cost value, the replenishment of the stock may be compromised because the inputs have become more expensive.
- In order to properly control the replenishment of the stock, it is also important to establish partnerships with a good distributor to ensure the supply of products and obtain good discounts. The more reliable your partners are, the less chance of running out of important goods for your business!
Now that you’ve seen how to control your petshop’s stock replenishment, check out tips to lower costs and make your distributor more competitive!