5 mistakes in inventory management in clothing

It is not uncommon for managers to ignore or fail to establish solid inventory management policies in the clothing industry. The reserve of products and raw materials in an industry reveals valuable information that goes beyond quantity or type of merchandise. Managing stock correctly can avoid many losses, production stops, and a drop in productivity and the quality of your products.

Given the importance of this sector in the industry, we have separated the main mistakes made in inventory management so that you do not fall into the same traps. Check it out.

1. Poor inventory management

Inventory is a list of all products, inputs and raw materials that are in your stock. This list specifies the type of material, value, quantity and other important classifications for identification. If you don’t have an inventory that is updated with each arrival and departure, you won’t know what is and isn’t available for use.

This is a document that will keep your purchasing department organized and will allow purchases from suppliers to be made in a timely manner, so that there is no surplus or shortage of raw materials or any other type of material.

Despite being so important, one of the most common mistakes in inventory management in clothing is precisely the neglect of inventory, which is not updated or does not follow a standard. Ideally, the industry should have a management system that automates this control whenever there is movement in stock.

2. Do not use the ABC curve

The ABC curve is a management tool that classifies information according to its importance or relevance to the business, or according to its impacts on administration. This categorization is done as follows:

• class A: most representative products or raw materials, that is, most relevant or most used in production (20% of the highest value items of 80% of the value of the entire stock)
• class B: intermediate and medium-value items;
• class C: items with less representation or relevance (representing 30% of items and on average 10% of the total stock value).

The ABC Curve methodology ensures better inventory organization and the definition of a standard and routine for entry and withdrawal. This way, the company has control over what needs to be replaced or not and when these purchases need to be made.

3. Failing to forecast demand

Demand forecasting is the process of anticipating demand for your products or a specific item. This is an assumption based on data and search history and not an unsubstantiated assumption.

Not making this forecast is one of the errors in inventory management in clothing that can unbalance your reserve, that is, buying too many or too few items and also planning production and productivity in cases of excess demand. To do this anticipation, you need to carry out market research and collect relevant data from your management systems.

However, it is worth highlighting that this is an estimate to guide your decisions, not an exact and concrete number.

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4. Not knowing the turnover of inputs

Calculating stock turnover reveals the speed at which products take to be renewed, that is, the time they spend in your reserve before being used. This also represents important information to guide your purchases and plan your inventory management. This way, you will know which items and raw materials need to be replaced more or less frequently.

The calculation is made using the following formula: total number of sales / average stock volume in the analyzed period = stock turnover.

5. Not using technology

The textile industry needs to deal with very specific items and in large quantities. Inventory control will hardly be efficient and correct without the use of management systems to control and automate movements.

Therefore, doing manual management is a mistake in inventory management in clothing, which can trigger all the problems mentioned above, in addition to losses and lack of control.

The warehouse of a textile industry has a direct link with the company’s productivity, cost management and competitiveness. Therefore, structure your inventory management and draw up strict policies and standardization to control purchases, inputs and outputs.

In addition to outdated and out-of-date inventory control, management will not be able to measure the actual physical inventory. Understand how to avoid it!