If you’re one of the 2.1 million farm owners we have in the country then you’ve probably noticed that managing a farm isn’t as easy as it seems.
Today, successful farmers have to be managers, accountants, and scientists; while also performing excellently at field activities. Besides that, they need to ensure there’s proper inventory management.
Although it may not sound like a big deal, farm inventory management is the most crucial aspect for successful farming. It helps you anticipate and plan for provisioning of materials and input. On top of that, it’ll allow the farmer to conduct business without any interruptions.
So if you want to know how to streamline your farm inventory planning, here are a few tips to guide you through:
1. Have a Proper Inventory Mix
The farm manager should ensure that the inventory mix displays the farm’s strategic direction. This means that you should regularly review your inventory to ascertain that all merchandise meets patron’s needs, is profitable, and has adequate market demand.
You’ll also have to constantly review the agricultural market outlook to determine where you can make inventory adjustments. If possible, try to survey or visit patrons so that you can identify how you’ll plan inventory to meet their needs.
2. Conduct Physical Inventory Counts
Though basic, physical counting is critical to the inventory management procedure. This simple method can serve as a deterrent to employee theft. It can also provide more accurate information on the farm storage conditions, leading to quick corrective actions.
3. Use Farm Inventory Software
Consider eliminating manual inventory processes and switch to software for agriculture.
Using a farm inventory software maintains authentic stock counts and reduces recording errors. In turn, this helps you make quick cancellations and enables you to provide clients with the highest level of food safety standards.
To top it all, using an inventory software allows for rapid retrieval and creation of inventory records. This lowers administrative requirements and hastens record keeping.
4. Use Profitable Inventorying Methods
As the farm manager, you should strive to eliminate wastage and minimize your cooperative’s ordering. A great way you can achieve that is by using the ABC inventory planning system. It’ll help you determine which items have a highly significant impact on inventory prices.
The most common version of ABC system categorizes items into high, medium, or low monetary volume. High turnover items like dog food or salt should be in stock all season. Lower sales merchandise such as lick tubes or oil filters should be monitored and replaced when signs of wear and tear start to appear.
Lastly, items with low turnover should get eliminated from the list completely. This may include specialty and seasonal items or items that the farm manager thought would perform in A or B categories.
Learn More About Farm Inventory at the Data-Driven Agricultural Summit
In as much as farm inventory is costly, it’s also necessary for effective farm supply operations. Therefore, ensure that your inventory is producing sufficient margins to support the carrying costs.
To learn more about agricultural inventory management, feel free to register with us for the next DataDriven Agricultural Summit.