Hello followers, Welcome to another day of our CEREALS BUSINESS TRAINING.
Inventory management refers to the process of identification of what stock to store and how much to store at which time.
It involves tracking and recording inventory from the moment it is bought to when it is sold to the customers.
The goal of inventory management is to always store sufficient goods to meet customer demand while minimizing excess inventory that can lead to an increase in costs.
You will see that inventory is considered an asset on your balance sheet. Before it is sold, it ties up cash and after it is sold, it turns into revenue.
Numerous metrics exist that determine if inventory management is successful or not. One of those is the inventory turnover which is an accounting measurement.
Inventory turnover tells you how much sock is sold during a specific period. An excellent inventory turnover ensures your inventory is turning to sales at a good rate.
A poor inventory turnover means you have to hold stock which is called deadstock.
This increases your carrying costs and leads to inventory storage inefficiencies which can eventually affect your production cycle.
Inventory management is crucial to the betterment of your business as it avoids the situation of overstock and understock.
SIGNIFICANCE OF INVENTORY MANAGEMENT
Inventory management enables you to save money by cutting down costs associated with storing inventory in your store or warehouses.
When you store excess stock in your store or warehouses, space is being occupied. When the stock doesn’t get sold, then it soon becomes obsolete and becomes dead stock which is unusable thereby causing wastage.
By eliminating this problem with the help of an inventory management system, you can better manage your store or warehouse space and reduce dead stock.
This efficiency allows you to save money while fulfilling your customer orders. It also frees up the cost tied to overstock in your store or warehouse.
With inventory management, you are aware of how much stock you have in hand and where it is located. This enables you to get access to the inventory when you need it.
An inventory management system allows you to rethink your inventory storage and costs. With the freeing up of costs by reducing excess inventory, you can improve your cash flow. This allows you to shift your focus on inventory that sells and that is in high demand.
This enables cash to move freely in your business. It also enables you to spend money in your business where it is required and thereby improve your business.
Inventory management can improve customer satisfaction. Imagine that customers order a product as it is high in demand. If you are unable to fulfill their orders, they will seek similar products elsewhere eventually when their demands are not being met for a long time by your business.
However, if on the contrary, you have sufficient stock at hand then you can ensure your customers always get the product on time when they place an order.
This ensures customer satisfaction and can improve your business revenue by generating profits.
INVENTORY MANAGEMENT TECHNIQUES FOR CEREALS BUSINESSES IN KENYA
When you are operating a business in Kenya, there are numerous approaches you can take to manage your inventory. Here are some tried and tested inventory management techniques that cereals businesses can use.
1. Opt for the FIFO approach
First in first out or FIFO refers to a method whereby you sell inventory that was purchased first. This means the new stock will only be sold after the old stock has been sold.
The FIFO approach works best for businesses that sell perishable goods such as food items because they can become obsolete if they cross their expiry date.
This approach can be successful for non-perishable items as well because it will ensure that older stocks get sold before the newer ones.
It is a simple method and will work when you are selling the same type of item to your customers.
2. Economic order quantity
The MOQ or minimum order quantity defines the minimum stock that you should have ideally to minimize costs related to inventory. It is useful for a variety of businesses including MSMEs.
It helps your business hold enough stock so that you are not overspending on the stock that might never be sold.
It helps reduce inventory carrying costs too as you know the ideal inventory levels. It can improve order fulfillment and it ensures you are not wasting money or stock that can eventually become obsolete if not sold.
You can even negotiate discounts with your suppliers as you will order in bulk.
3. Take time to forecast
Inventory management requires some form of demand forecasting based on historical data. You need to compare how much inventory was required in the past to determine how much might be possibly required at present.
You need to also factor in the market trends to ensure you have sufficient inventory with you to meet demand.
Forecasting will ensure you don’t end up with excess stock or a lack of stock when demand changes.
When you have an inventory management system in place it becomes much easier to consolidate information and derive insights.
4. Be aware of stock
Many business owners in Kenya make the mistake of measuring their stock levels at certain points only. This is a big mistake and something you want to avoid if you want to grow.
You need to have an inventory management system in place that allows you to keep track of your stock every single day.
At any point in time, you should be able to get access to the inventory levels and instantly get the information that you need.
You should be capable of knowing the expiry dates of the stock and when they were purchased too to ensure you can strategize and sell the stock accordingly.
5. Determine stock that isn’t sold for long periods
You want to keep track of items that are not being sold for months. Keeping such stock will only increase your store or warehouse costs and will take up valuable space there.
When you determine such items, you can decrease re-ordering of those items as clearly the demand for such items is low.
It is a futile attempt to store them in the hope that they will be sold someday. Instead, lower the inventory of such items to ensure only the ones that are high in demand are being stored in your store or warehouses in places where your employees can get easy access to them.
Sell the old stock by giving discounts on those items.
6. Just-in-time or JIT inventory management
One of the inventory management techniques is just-in-time or JIT inventory management.
In this method, you order right before production begins to ensure you are not carrying excess inventory in advance.
As the need arises, you can order the required quantities for replenishment and ensure the production can start.
It works best in cereals milling business when you are locally sourcing and when you are prepared for disruptions that can occur such as due to natural disasters.
JIT is used by numerous cereals milling and distribution businesses in Kenya and it is a technique to consider if you have reliable and strong supplier relationships.
At the end of the day, the inventory management technique that you choose should depend on the type of cereals business you are in, the industry you operate in, and what you sell.
PLAN ON WHAT TO STOCK
You don’t have to be a farmer to get your stock of cereals. There are many wholesalers who can supply you with your initial stock at a reasonable price (in Nairobi wholesalers are mainly found in Nyamakima area).
Alternatively you can plan for a trip to the rural areas so that you can negotiate for even cheaper prices. For instance, you can get cheaper rice from places like Mwea and Kagio or cheaper maize from Chwele in Western Kenya.
Tips For Buying Stock
*Make sure the grains are properly dried to prevent rotting as this could “burn” you.
*Timing is important. For instance, it is cheaper to acquire your maize stock when farmers are looking to empty their granaries awaiting the next harvest.
Some of the fast moving products out of a cereal shop include:
Beans: Nyayo, Rosecoco, Yellow beans, Mwitemania, Butter Beans, Gituru and Gachuma varieties.
Porridge Flour: Baridi, Wimbi, Mawele, Mtama, Ndimu.
Green Grams: Ordinary, Nylon, Makueni, Lentils.
Nuts: Njugu Mawe, Groundnuts.
Rice: Pure Mwea, Thailand, Pakistan, Sindano, Fivestar, Basmati, Brown Mwea.
RICE WHOLESALERS IN KENYA
Below is a list containing contacts of Rice Wholesalers and Distributors who supply all over Kenya.
DOUBLE D & SONS PISHORI RICE AND CEREALS DISTRIBUTORS, MWEA
Address: Ngurubani, Mwea, Wang’uru
Phone: 0759 205300
PISHORI RICE SUPPLIERS
Address: Githurai
Phone: 0722 623602
MWEA RICE GROWERS MULTIPURPOSE CO-OPERATIVE SOCIETY (NAIROBI SHOP)
Address: Jogoo Rd, Nairobi
Phone: 0713 556428
WIS-WIN CEREALS KASARANI
Address: Clay City, Kasarani Mwiki Rd, Nairobi
Phone: 0722 402490
ZIPPORRAH RICE KAK
Address: Nairobi
Phone: 0700 538458
ROYPISHORI LTD – FEEDS AND FOOD SUPPLIES
Address: Mwea, Wang’uru
Phone: 0794 014042
TEBERE GENERAL STORES
Address: Outer Ring Rd, Nairobi
Phone: 0729 033055
NICE RICE MILLERS
Address: kirinyaga
Phone: 0792 520587
DIAMOND WHOLESALERS LTD
Address: Off First Avenue, Eastleigh, Fourteenth St, Nairobi
Phone: 0722 925599
GRAIN PREP
Address: Likoni Shopping Mall Kwa Reuben Embakasi South
Phone: 0724 568266
LUUGANO CEREALS
Address: Off Moi Drive Umoja II Embakasi West
Phone: 0700 418559
IMANI CEREALS-KAYOLE
Address: Kayole Central Embakasi
Phone: 0711 635301
QUEEN PURE PISHORI
Address: SHEIKH KARUME RD
Phone: 0723 668099
WAMSO CEREALS
Address: Kangundo Rd, Nairobi
Phone: 0723 313371
WAMURUNGI CEREALS
Address: Tassia road Pipeline Embakasi South
Phone: 0705 238849
Above are some of the contacts of Rice Wholesalers and Distributors in Kenya my team and I managed to collect during the research for this training.
Feel free to post some of your trusted contacts in our training group once the group is open for questions and discussions.
BEANS WHOLESALERS AND DISTRIBUTORS IN KENYA
Below is a list containing contacts of Beans Wholesalers and Distributors who supply all over Kenya.
Mavuno Cereals Store
Address: Mountain View, Waiyaki Way, Nairobi
Phone: 0717100933
Diamond Wholesalers Ltd
Address: Off First Avenue, Eastleigh, Fourteenth St, Nairobi
Phone: 0722 925599
Tebere General Stores
Address: FEDHA stage, Outer Ring Rd, Nairobi
Phone: 0729 033055
GN GENERAL CEREALS STORES
Address: Jamhuri Market Thika, Opposite, U Shop Rd
Phone: 0703 353229
Langata Cereals Suppliers
Address: kitengela road, Nairobi, Kenya
Phone: +254715714547
Nyamakima Cereals
Address: Shop 5, Ground Floor, Catherine Ndereba Road, Nairobi
Phone: 0704 541723
Nane Cereals and Store
Address: Embakasi, Nairobi, Kenya
Phone:0770662382
Grain Prep
Address: Likoni Shopping Mall Kwa Reuben Embakasi South
Hours: Open ⋅ Closes 7PM
Phone: 0724 568266
Nemuwa Jogooroad
Address: Jogoo Road
Phone: 0738 740805
Betta Grains
Address: Next To Tumaini Super Market, Outer Ring Rd, Nairobi
Phone: 0722 780799
BEANY BEANS SUPPLIERS
Address: PX72+6JJ, Bramo arcade Utawala Embakasi East, Nairobi
Phone: 0716 633336
Highlands Cereals Grains Kenya
Address: Nairobi Mbagathi way, Mtihud Market Stalls, Shop 154
Phone: 0723 097706
MEGAWHOLESALERS LIMITED
Address: Mega Wholesalers LTD, Kangundo Rd, Nairobi
Phone: 0720 667958
Above are some of the contacts of Beans Wholesalers and Distributors in Kenya my team and I managed to collect during the research for this training.
Feel free to post some of your trusted contacts in our training group once the group is open for questions and discussions.
NDENGU AND PEAS WHOLESALERS AND DISTRIBUTORS IN KENYA
Below is a list containing contacts of Ndengu and Peas Wholesalers and Distributors who supply all over Kenya.
GN GENERAL CEREALS STORES
Address: Jamhuri Market Thika, Opposite, U Shop Rd
Phone: 0703 353229
Betta Grains
Address: Next To Tumaini Super Market, Outer Ring Rd, Nairobi
Phone: 0722 780799
Highlands Cereals Grains Kenya
Address: Nairobi Mbagathi way, Mtihud Market Stalls, Shop 154
Phone: 0723 097706
Nyamakima Cereals
Address: Nairobi
Phone: 0722 667831
Waker Cereals Suppliers
Address: Wakulima House Near K.P.C.U, Nairobi
Phone: +254722906041
Mwawa and Tanrop Limited Supplier
Address: Uthiiru, 87 junction, Nairobi
Phone: 0722609358
Tebere General Stores
Address: FEDHA stage, Outer Ring Rd, Nairobi
Phone: 0729 033055
Above are some of the contacts of Ndengu and Peas Wholesalers and Distributors in Kenya my team and I managed to collect during the research for this training.
Feel free to post some of your trusted contacts in our training group once the group is open for questions and discussions.
NUTS WHOLESALERS AND DISTRIBUTORS IN KENYA
Below is a list containing contacts of Nuts Wholesalers and Distributors who supply all over Kenya.
Mwangaza Cereals Suppliers
Address: Old Malindi Rd, Mombasa
Phone: 0722 276060
Nemuwa Jogooroad
Address: Jogoo Road
Phone: 0738 740805
B/ S Cereal Store
Address: Jitegeme, Old Malindi Rd, Mombasa
Phone: 0725 888559
Kenya Nut Company
Address: Opposite Bahman Charitable Foundation Building, Mikindani St, Mombasa
Phone: 0720 410500
Gnick Cereals
Address: Nairobi
Phone: 0752 668162
Eden Cereal and Spice
Address: Ruaka, Town, Along, Limuru Rd, Nairobi
Phone: 0795 885537
Nyamakima Cereals
Address: Nairobi
Phone: 0722 667831
Highlands Cereals Grains Kenya
Address: Nairobi Mbagathi way, Mtihud Market Stalls, Shop 154
Phone: 0723 097706
Lianka Cereals
Address: Nairobi
Phone: 0727 028502
Above are some of the contacts of Nuts Wholesalers and Distributors in Kenya my team and I managed to collect during the research for this training.
Feel free to post some of your trusted contacts in our training group once the group is open for questions and discussions.
MAIZE WHOLESALERS & FLOUR MILLERS AND DISTRIBUTORS IN KENYA
Below is a list containing contacts of Maize Wholesalers & Flour Millers and Distributors who supply all over Kenya.
Lanet Grain Stores Ltd
Address: Laini Moja kitale Free Area nakuru, Kitale
Phone: 0721 669274
Pembe Flour Mills Limited
Address: Lunga Lunga Rd, Nairobi
Phone: 0700 114444
Mukhombe General Store
Address: Opposite Dayan Booking Office, Kitale – Mumias Highway, Kitale
Phone: 0702 036988
National cereals and produce board -NCPB KITALE DEPOT
Agricultural service supply agency in Kitale
Address: Kitale
Premier Flour Mills Ltd-Industrial Area
Address: Mogadishu Rd, Nairobi
Phone: 0733 333079
Baraka Flour Mills
Address: Changamwe Rd, Nairobi
Phone: 0711 484848
Pembe Flour Mills Ltd-Industrial Area
Address: Viwandani Lunga Lunga Makadara
Phone: 0716 777722
Betta Grains
Address: Next To Tumaini Super Market, Outer Ring Rd, Nairobi
Phone: 0722 780799
Simba Mfalme Millers Ltd
Address: Nairobi
Phone: 0714 619211
Ole PK Cereals And Green Maize
Address: Next To Kitengela Girls High School Kitengela
Phone: 0724 275908
Mama Rebbecca Cereals Store
Address: Manyatta Peace Market, Jasaye Enterprises, Manyatta Peace Market Road, Kisumu
Phone: 0729 597408
Faulu Flour Mills
Address: Baba Dogo Rd, Nairobi
Phone: 0721 277228
ALPHA GRAIN MILLERS LTD
Address: Athi River
Phone: 0701 586679
Philse Millers
Address: Eldoret/Kapseret Kapseret KE
Phone: 0722 345932
Above are some of the contacts of Maize Wholesalers & Flour Millers and Distributors in Kenya my team and I managed to collect during the research for this training.
Feel free to post some of your trusted contacts in our training group once the group is open for questions and discussions.
END OF DAY 7 CEREALS BUSINESS TEACHING SESSION
We now come to the end of today`s teaching session, The PDF of this teaching is available here. Please comment your thoughts and questions below.
