An often ignored and overwhelming area in spa and salon management is effectively handling inventory. This entails ensuring products are used in amounts as required to limit wastage, accurately tracking inventory to limit pilferage and ordering the right amount of products to ensure you are neither over-stocked nor under-stocked.
Given the high turnover of product, a large variety of products that can be used, the relatively small quantities that are often required and that inventory is typically stored in multiple locations; it can be challenging to monitor usage of products on a busy day. Additionally, most spa managers do not know how much their business loses from wastage and pilferage over the course of a month.
These challenges can be addressed by defining an inventory tracking system that does not require you or your manager to spend a lot of time on inventory.
In this whitepaper, you’ll learn how to implement inventory tracking processes that help you get a handle on inventory management.
Inventory is often tracked through paper-based registers or inventory logs where employees check in items delivered to a store room and check out items from the store room to be used on the floor. Registers are useful, but make generating reports and verifying stock levels tedious and difficult. They also do not help to track products that are about to expire or track inventory that is not moving. For chain spas or salons, tracking inventory effectively is more complicated and can become a significant expense.
Inventory management processes should use a method that is easily and consistently followed and meet the following goals.
Every spa and salon should have a store room within the facility. Inventory that arrives should be signed into the store room. Similarly, when a product is taken out of the store room, the employee name and product quantity should be recorded and signed. .
This can be achieved through the use of a register, but software allows for further benefits. For example, software can use logs of product check ins and check outs to automatically calculate expected product levels for the store room based. This information can then be used to run monthly audits of the store room.
With a dedicated storeroom, you can assign a stores manager to be solely responsible for ensuring all items are checked-in and out. This enables you, the owner, to hold that stores manager accountable for inventory levels in the store room and for any discrepancies.
For proper inventory control, you should conduct a monthly, physical audit of the store room. The audit is best performed by someone who is not part of the day to day operations of the spa. The audit should show that product levels match with expected inventory levels based on the register of incoming and outgoing products from the store room. This ensures that staff is following the sign-in and sign-out process, and that no pilferage has occurred. Without this basic adherence to process, it becomes hard to manage inventory in any center.
You may want to keep retail products, the products that you sell to customers, separately from the products consumed for your services. Tracking retail inventory is easy. Whether you use a register, a stand-alone POS (Point of Sales) machine, or a sophisticated software like Zenoti, you should have a tally of product sales.
Simply use the sales tally from product sales and compare against the number of remaining products you have in the stores room and on display units. Any discrepancies in actual retail product levels against the expected levels should be considered pilferage and looked into immediately.
After products are placed on the salon floor or into treatment rooms, tracking product usage becomes challenging as well as critical for overall inventory control.
First, determine how much product should be used for each treatment. Any single treatment can use a variety of products. For example, a scrub might use three different salts and two oils. Regardless of the small quantities and number of products, it is important to determine the expected amounts to be used.
Not only is this important information for therapists as part of their training, but this data can be used by software to do the heavy calculating and yield interesting results.
If you enter product usage for every treatment you offer, the software could give you a projected level of inventory for any product. By entering product usage amounts into the system once, you get ongoing control of your inventory and get access to expected product levels at any time.
Software can automatically generate projected inventory levels for the store room and on the floor based on items that were checked-in and out of the store room. This provides a practical method to track movement of inventory. This does not, however, ensure that the right amount of product was used for the services performed in the month.
However this is a baseline, and should be used to either order more stock or stop from ordering extra.
Every month, after an audit is performed, the inventory management system should be able to report two issues:
The processes and reports discussed so far are used by a manager to control inventory. The following reports help the owner monitor inventory across all their centers very quickly:
A key aspect of inventory is “Just-in-Time Inventory Management”, which helps managers to stock appropriate levels of products. It is important to:
A common task for your manager is to order products, ideally on a monthly basis rather than haphazardly. To do this in an organized manner, and spend less time on orders, you need to determine what product and how much to order. Consider the following process:
If you operate multiple centers, you can easily transfer inventory between locations to respond to product demand and shortages. An identical PO process can be used between centers and the system can track the transfers and changes in inventory per center.
While products are ordered on a regular basis, it is easy for a manager to miss low stock levels between ordering cycles. An inventory management system should automatically send alerts when any product level falls below a specified threshold. The system should continue to send these alerts on a regular basis until inventory levels reach above the threshold.
While inventory management can seem an overwhelming task, a good inventory management software, like Zenoti, helps you streamline and get a handle on inventory without losing time in your day-to-day operations. You’ll be able to manage costs, reduce pilferage and reduce wastage through an automated, easy to use system
Zenoti all-in-one software has helped thousands of spas, salons and medi spas grow their revenue. Request a personal demo to learn more.