Inventory Management Tips for Interior Designers
April 11, 2023
An interior design inventory list can make inventory management a whole lot easier for interior design firms, especially if they’re handling large inventories from multiple locations and have physical offices.
From managing multi-location inventory to tracking items and managing POS systems, there’s a lot involved in interior design inventory list management.
In this guide, we’ll go over the steps you need to take to make inventory management a breeze.
Tips for Optimum Interior Design Inventory List Management
1. Track All Product Information
From barcodes and supplier data to country of origin and lot number, keep track of all product information. Here is a list of information you need to keep track of:
- Item Description: This includes the name, model, color, size and any other details about the item.
- Quantity: You will want to know how many you have on hand and how many you need for each project
- Vendor Details: Record the name, phone number, email, site URL and purchase details of the vendor you purchased from.
- Cost: You will want to log not just the purchase price but also other costs such as taxes and/or shipping. This helps you with expense and margin management.
- Location: Record the storage location of the item so you can locate the item easily when needed.
- Project: Assign each item used in a project to the design project. This helps with budgeting the projects.
- Status: Record the item status. Some statuses could be around whether the item is on hand, out of stock or rented out to a partner. Others could be about whether it is backordered, discontinued or on promotion etc.
- Item History: Log the journey of the item from date of purchase to date of receipt and date of use. This helps with planning item purchases in the future and see the quick turnover (i.e. popular) items.
- Other: Organize documentation for assembly, appraisals, certificates of authenticity etc. so that putting items to use in a project or communicating with stakeholders is a cinch.
2. Categorize Your Inventory
Categorizing interior design inventory can help you analyze usage and locate items quickly and easily. Here are some ways you might want to consider setting up your categories:
- By Product Type: Categorize items based on what they are such as furniture, fabrics, lighting and accessories.
- By Style: Organize items by style, like traditional, modern, vintage or brutal.
- By Project: Sort items into their assigned projects.
- By Palette: Assign items to color palettes so that locating matching items is easy.
- By Material: Categorize items by what it is made out of glass, metal, fabric or wood. When items are made our of multiple materials you would pick the primary material here.
- By Vendor: Assign items to vendor based categories in order to track purchase history and manage vendor KPIs such as lag time and average cost.
- By Price: Separate inventory items into groups based on cost. For example, put all high-ticket items into a few categories and all low-cost items into a different category hierarchy.
- By Turnover: Segregate items based on how quickly they’re used up. This will help you store and manage inventory more appropriately while allowing you to reorder based on turnover.
3. Keep Consistent SKUs
Set a standard for assigning your inventory items with stock-keeping units or SKUs. Identify the main features of your products along with their supplier codes, etc., and establish a numbering system for every feature/code.
Make sure you use a standard method for assigning the SKUs or you risk generating overlapping codes that can lead to errors in operations.
Some interior design inventory list management software may have SKU code generators. You can use these to generate unique SKUs for each product.
SKUs make it easier to identify items and track their locations in storage or across warehouses.
4. Use an Inventory Management System
Simplify inventory management using software systems to:
- Optimize stock levels
- Forecast demand
- Monitor stock movements across multiple locations
- Track shipments
- Carry out inventory valuations
- Manage bills from vendors
- Generate instant invoices
An interior design inventory list management software should offer ready integration with sales management and accounting systems. This lets you save costs and manage purchases all in one place.
You can also get software that has collaborative features, allowing different teams to work on one platform.
5. Use Inventory Tracking Equipment
You want to use some form of tracking equipment to automate your inventory tracking processes and make them more efficient. Here is what you need to consider:
- Barcode and/or QR code scanner: You can choose an appropriate scanner based on your preferred tracking method. These can be camera-based, Bluetooth or USB. Just make sure that it can be integrated with your inventory management software.
- Label Printer: You can use a label printer to print QR code and barcode labels that are scannable. Makes updating and locating items easier.
- Storage and Shelves: Appropriate storage solutions for your inventory is absolutely critical to smooth operation.
- Computers and Tablets: Tablets or smartphones along with computers can be used to access and update your inventory closer to storage or far away from your warehouse.
- Security Devices: Anti-theft devices, security cameras and/or other mechanisms could be optionally deployed in order to help prevent shrinkage.
6. Use Inventory Forecasting
Analyze data from your previous sales, demand cycles, etc. to predict your future performance and prepare for it accordingly.
Get started by looking at your sales trends and graphs to calculate average demand. Note demand spikes or dips and the events that caused them. Lastly, look at your future sales cycle. Then, predict demand, reorder points, safety stock levels, and economic order quantity (EOQ) based on previous years’ trends and your deductions.
Accurate forecasting can help you avoid stockouts so you can attract and retain customers while staying ahead of the competition.
7. Stay On Top of Inventory Valuation
Carry out inventory valuations to understand your inventory’s financial performance and budget more accurately. An inventory valuation tells you the value of your unsold inventory.
It’s calculated by multiplying the number of unsold items with the unit price of the items. Since the price of the inventory is constantly changing, your business needs to use a valuation method with a cost flow assumption.
There are three methods you can use when calculating the value of unsold items.
The FIFO method assumes all your inventory items enter and leave the warehouse in the same order. Under the FIFO method, your unsold items are valued at the price of the batch most recently purchased.
With LIFO, you assume the interior design inventory list items that enter your warehouse last are sold first. In LIFO, you assume the price of the items purchased first during the year and use them to determine the value of unsold items at the end of the year.
Weighted Average Cost (WAC)
With the WAC method, you calculate the average rate you paid for items throughout the year, then assign the same price to unsold items at the end of the year.
Here’s the formula you need to calculate the WAC,
WAC = total cost paid for items during the year / total number of items purchased
8. Regularly Audit Your Inventory
Conduct regular audits to confirm whether all inventory processes are working accurately. Cross-check physical inventory against the numbers in the software. Take a look at the turnover ratio, inventory costs, shrinkage, etc. to check if they’re consistent with historic trends.
You can also run audits for different subsections of your interior design inventory list if a full inventory count is too disruptive to perform regularly.
This audit can be performed by you, an employee, or a third party that you hire.
9. Designate the Responsibility to a Specialist
Hire a full-time inventory manager or assign the responsibility of overseeing all inventory-related tasks to one or more of your employees. This includes signing off on shipments, running cycle counts, placing orders, managing orders, etc.
This step ensures accountability for all inventory processes.
How To Create an Interior Design Inventory List
You can prepare an interior design inventory list in three ways:
All you need to do to create an interior design inventory list on paper is to write down product details. This is ideal for those with a small inventory but it’s still time-consuming and the work can get repetitive.
This method is the most manual of the three and is prone to errors.
Spreadsheets are the second best option for creating an interior design inventory list.
This method involves opening an excel sheet or using a template to enter all the product details you want to track. While that may sound easy, it requires in-depth knowledge of how spreadsheets work.
Another problem with spreadsheets is not everyone can access them to track products. Plus, there is still a high risk of errors with spreadsheets since it involves a lot of manual processes.
Using Inventory Management Software
An inventory management software makes it much easier to create an interior design inventory list. Let’s take Nest Egg as an example.
With Nest Egg, interior designers can create a multimedia inventory with pictures, videos, and audio notes. This simplifies the task of creating inventory lists and tracking items.
You can also get useful functionality out of the Nest Egg app such as:
- Tracking inventory and purchase/sales orders
- Scanning QR codes or barcodes
- Organizing items by location, project, style, and other tags
- Locating items faster via scannable labels
- Staying within budget
- Avoiding buying what’s already in stock
- Cross-checking online prices for items
- Multiple location tracking and management
- Reports of paper trails
Nest Egg addresses many of the problems that accompany the two previous methods. It thus employs simple data entry, intuitive layouts, and convenient data management so you can save time and stay on top of your inventory.
Managing Interior Design Inventory List Across Multiple Locations
Sometimes, you need to manage inventory for projects across multiple locations. These tips will help you track your interior design inventory list optimally no matter how they’re spread across different venues.
Use one system across locations so that inventory from all locations are managed the same way, and there is a single source of truth. If this is not possible because of legacy or legal reasons, reduce the number of systems in use to a minimum, and you would need to sync them periodically at a frequency that is fast enough for you to operate optimally.
Integrate With Suppliers
You could consider integrating your systems with your suppliers’ systems to ensure adequate stock levels and automate reordering. Also known as vendor managed inventory, this kind of set up allows you to share inventory levels with suppliers so they can restock your inventory when it gets too low.
If this is not realistic for all of your suppliers, perhaps a few of the top vendors could be connected up this way to reduce stock outs and prevent overstocking.
Use Inventory Analytics
Use the data from your inventory management software to make better decisions for reordering. Your inventory management software can supply you with location-based reports. Use these reports to forecast location-specific demand, place orders, create accurate balance sheets, and more.
Back up Inventory Data
Back up inventory data from all your locations ensure you and your team can always access accurate inventory lists at all times, even if you lose data in one of your locations. The best way to ensure that your backup data stays safe and accessible is by putting it on-premise close to the location, at a different location and on the cloud. This way you have ample copies of backup just in case you need to access any of them after a cyber event or a disaster.
If you are managing data in a non-centralized manner or using a non-cloud system, taking regular backups becomes even more of a priority. Make sure to test your backups from time to time by simulating the data recovery steps.
Managing an interior design inventory list is one of the many tasks interior designers have to undertake. We hope these tips can make the process much easier for you.
If you want to implement these suggestions, we suggest choosing an inventory management software first. This will simplify putting all our tips into practice. Make sure you do your research and choose one that fits your needs the best!
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