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How to Improve Stock Turnover and Boost Your Business’s Profitability

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Unlocking the Secrets: How to Improve Stock Turnover and Boost Your Business’s Profitability

The cleaning industry has been constantly growing and is now worth over $90 billion (US). The industry is expected to continue growing over the next few years. To take advantage of this growth and increase revenue, cleaning businesses should consider the following steps:

1. Implement technology to streamline operations and keep up with the growing market.

2. Focus on maintaining profit margins by controlling labour costs and finding ways to increase efficiencies.

3. Use proof of service tools to attract and retain customers. You can build customer trust and loyalty by demonstrating that you provide high-quality service.

With this in mind, we focus on improving stock turnover using new tools to boost productivity and profitability.

 

How to improve stock turnover

Understanding stock turnover and its importance

Stock turnover is a vital aspect of running a successful business.

Effective stock control is essential for service-based businesses to maintain smooth daily operations and optimise overall performance.
Ensuring a service doesn’t run out of stock is crucial to maintaining a high production level. This directly impacts your business’s profitability.
By comprehending the concept of stock turnover, you can make informed decisions to improve your business’s financial health.

In this blog post, we will look at how to improve stock turnover to ensure a smooth running of operations.

 

Factors influencing stock turnover

Several factors influence stock turnover, and it’s essential to consider them when analysing your inventory management strategy.
One significant factor is customer demand. Understanding the required amount of stock for the business contract is crucial.
For example, in the case of a cleaning company. Organisations must ensure cleaners have enough products (consumables and equipment)to perform their daily tasks properly.

If a company waits until the stock has run out before ordering more, this will have a detrimental impact on the professionalism and efficiency of the service you are contractually obliged to provide.

 

Common challenges in stock turnover

Many businesses need help managing their inventory despite the importance of stock turnover.

Overstocking

One challenge is overstocking, which occurs when excessive inventory runs past its shelf life.
Overstocking ties up capital and storage space, increasing holding costs and potentially obsolete products.

Understocking

On the other hand, understocking can result in abandoned services and dissatisfied customers. Balancing your inventory levels to meet demand and avoid overstocking or understocking is crucial for improving stock turnover.

Poor demand forecasting

Another challenge is poor demand forecasting. You may need more adequate or excessive inventory if you can accurately predict customer demand.

 

How to improve stock turnover

Improving stock turnover requires a comprehensive approach addressing various inventory management aspects. Here are some strategies to enhance your stock turnover and boost your business’s profitability:

How to improve stock accuracy for better turnover

Effective inventory management is crucial for improving stock turnover.

1. Stock analysing

Start by thoroughly analysing your current inventory levels and sales data.

2. Prioritise expiring stock

Identify slow-moving or obsolete products and consider liquidating or discounting them to free up capital and storage space.

3. Improve employee ordering co-ordination

Focus on improving the stock ordering system in place. This will ensure you have the right amount of inventory at the right time, avoiding excessive holding costs and stockouts.

Utilising technology for efficient stock management

Leveraging technology can significantly enhance your stock turnover.
Implementing inventory management software can help you track and optimise your inventory levels accurately.
These systems provide real-time visibility into your stock, allowing you to make data-driven decisions.
Furthermore, consider implementing barcode, QOR Code, or RFID (Radio Frequency Identification) systems to improve accuracy and efficiency in stock tracking.
These technologies enable faster and more reliable inventory counts, reducing the chances of errors and improving overall stock turnover.

 

Overcoming language barriers in the workplace

In the cleaning industry, there are often many workers from diverse backgrounds.

International employees bring valuable qualities to the workplace,.
Supporting them with practical communication tools enhances their productivity and fosters a more inclusive and collaborative work environment, ultimately benefiting the entire team
Effective communication is vital for efficient stock management and improving stock turnover.
To overcome this challenge, you can either:

1. Language training

Consider implementing language training programs to enhance employees’ communication skills. Encourage open dialogue and provide resources such as translation tools or interpreters when necessary.

2. Use simplified tools

Use tools to help with language barriers that eliminate the need for spelling, reading, and talking. Look for software employees can use to select items via images and sliders to choose quantities removing the need to type in a language they are unfamiliar with.

By fostering effective communication, you can ensure everyone understands their roles and responsibilities, improving stock turnover.

Utilising DocFlite online stock Request Portal tool for stock control in cleaners’ roles

In the cleaning industry, efficient stock turnover is crucial.
The DocFlite online stock request portal greatly enhances output. Read here for more details:

6 reasons why stock control is important

This tool allows cleaners to submit stock requests online, streamlining the stock management process.
It eliminates the need for manual paperwork and reduces the chances of errors or miscommunication.
This tool ensures cleaners have access to the necessary stock, leading to smoother operations and improved stock turnover.

 

Answering People Also Ask:

How can stock turnover ratio be improved?

Implementing various strategies improves the stock turnover ratio. These are:

  • Optimising inventory levels
  • Reducing lead times
  • Improving forecasting accuracy
  • Streamlining supply chain operations

By keeping inventory levels in check, businesses can reduce inventory costs and avoid stockouts or overstocking.
Shortening lead times can help businesses respond faster to customer demands and avoid excess inventory buildup. Improving forecasting accuracy can help enterprises to better anticipate demand and adjust inventory levels accordingly. Finally, streamlining supply chain operations can help companies to reduce costs and improve delivery times.

How can you maximise inventory turnover?

Maximising inventory turnover is essential for businesses as it helps improve cash flow, reduce storage costs, and increase profitability. Here are some ways to achieve it:

1. Forecast demand accurately
2. Optimise inventory levels
3. Streamline supply chain
4. Offer promotions and discounts
5. Implement just-in-time (JIT) inventory

What causes inventory turnover to increase?

Inventory turnover can increase due to efficient inventory management, faster sales, purchase reduction, or better inventory control.

Why is communication important in the cleaning industry?

It’s commonplace for cleaning agencies to employ international workers. It’s well known in the industry that there can be difficulties with internal communication between workers and managers. -Especially when it comes to stock requests.
Utilising a tool that can help bridge the communication gap with images boosts a company’s performance. Ensuring a smooth running of operations and happier staff.

What could be used as a way to communicate with the cleaning staff?

Many of our clients in the past communicated with their staff through WhatsApp, email or text.

Communicating via WhatsApp is convenient, quick and straightforward. But presents many other problems, such as:

  • Foster’s use of personal phones on shift (this could look unprofessional)
  • Doesn’t solve any potential communication issues with employees who do not have English as their first language.
  • Staff can become easily distracted on shift if they need to use personal phones
  • Easy for communications to get lost in a sea of emails and messages
  • Very inefficient for employers having to gather information from many different locations

A better method is to use, that benefits both the employer and employee is a stock request portal. It’s centralised, organised and easily accessible. All while making requests simple.

 

Conclusion: Taking action on how to improve stock turnover

Improving stock turnover is essential for boosting your business’s profitability and financial health.
Enhance your inventory management practices by understanding stock turnover and its importance. Consider the factors influencing it and implement strategies to overcome common challenges.
Optimising inventory management, overcoming language barriers, and utilising tools like the DocFlite online stock Request Portal effectively improve stock turnover.
Monitoring and adjusting your inventory management strategy enhances stock turnover and drives your business’s success.

CTA: Visit DocFlite’s Cleaning Stock Request Portal

Efficient Stock Request Portall

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