Is Lean Inventory Management Right For Your Business?

Lean inventory management is a term that's becoming more and more popular in today's retail industry. With retail markets more competitive than ever, businesses are looking for ways to increase their profits. There are dozens of techniques used by retail businesses to 'up' their profits, one of which is by implementing lean inventory management. This is a simple yet highly effective principle that works in practically any retail market or industry. To learn more about lean inventory and management and whether or not it's right for your business, keep reading.

What Is Lead Inventory Management?

If this is your first time hearing about lean inventory management, let me give you a brief explanation of this concept: in short, it's the process of constantly analyzing and fixing unnecessary inventory expenses. Some businesses may perform a single expense audit and never follow up with a second one in the future. Lean inventory management works because it's focused on the principle of perfection; retail business owners utilizing this philosophy are constantly working to improve their profits by eliminating unnecessary inventory expenses.

You might be surprised to learn that automobile pioneer Henry Ford is responsible for inventing the concept of lean inventory management. Ford's goal was to create a fluid-like assembly line where workers moved in-sync with one another; thus, reducing wasted time, resources and money. Ford's methodology was such a success that it carried into numerous other industries. After nearly a century, lean inventory management remains a highly effective way for businesses of all shapes and sizes to conduct their daily professional operations.

Lean Inventory Management In Retail

So, how can you implement lean inventory management in your retail store? The answer is simple: take a proactive approach towards identifying and fixing unnecessary expenses. See the list below for more tips on how to perform lean inventory management in a retail store:

• Negotiate lower prices with product manufacturers and/or distributors.
• Analyze shrink on a monthly basis to determine exactly where product is lost.
• Reward employees whom take the initiative to reduce product loss.
• Follow the principle of "there's always room for improvement."

Now for the question that's likely on your mind: is lean inventory management right for your business? Since there's really only benefits and no disadvantages with this approach, the answer is YES; lean inventory management is a highly effective way for businesses to boost their profits.