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Inventory Techniques for Health Supplement Products

A health supplement is a product that is used to complement diet as well as to support, maintain and improve the health functions of the human body. These products often have varying shelf lives, formats, storage requirements, demand patterns and regulatory considerations, causing inventory control distinct from other industries. Inventory management in health supplement businesses requires not just maximizing profits and ensuring optimal stock levels but also maintaining regulatory compliance, meeting consumer needs and supporting long-term business success to build a strong market presence. In Singapore, health supplements stakeholders, such as importers, manufacturers, wholesale dealers and sellers have the obligation to ensure that their products are safe and that they conform to regulations issued by the Health Sciences Authority (HSA) before supplying the goods into the country.

Market Demand and Forecasting

Health supplements have been becoming gradually popular as more people are seeking alternatives to improve their health and wellness goals. As a result, the health supplement industry has seen consistent growth over the past decades. This has also driven the demand for safe and effective high-quality products.Understanding and predicting market demand accurately is a critical aspect of successful inventory management in the health supplement industry. With market trends changing rapidly and consumer preferences evolving, it becomes necessary for businesses to stay ahead of the curve. Robust demand forecasting involves a thorough analysis of historical sales data, monitoring changes in market trends, and considering promotional and seasonal patterns. Accurate demand forecasting mitigates the risk of costly overstocking and prevents stockouts, ensuring that popular products are readily available during peak seasons and avoiding excess inventory during slower periods to maintain consistent customer satisfaction.

Stock Rotation and First Expired, First Out (FEFO)

Maintaining product safety and quality is crucial in the health supplement industry, where expiration dates and potency can affect customer satisfaction and regulatory compliance. The FEFO inventory technique ensures that products with older shelf life are sold before newer ones. This is particularly important for health supplements with limited shelf lives by reducing the risk of product wastage through expiry and ensuring stock rotation. Proper implementation of the FEFO system through organizations and storage practices, ensuring that older inventory remains readily accessible for sales. Additionally, FEFO helps to enhance regulatory compliance by minimizing the likelihood of selling expired products which might create unwanted safety concerns.

Safety Stock or Buffer Inventory

Health supplement products often face supply chain disruptions and demand fluctuations due to factors like changing consumer preferences, promotion and seasonal trends. Safety stock, also known as buffer stock, acts as assurance against these uncertainties. Safety stock is a strategic way to mitigate the risks of stockouts and overstocking, guaranteeing a consistent supply of health supplement products to customers and maintaining brand reputation.The level of safety stock should be determined based on aspects such as historical demand patterns, lead times for restocking and the cost of stockouts versus holding excess inventory. Automated inventory management systems could help calculate and estimate safety stock levels dynamically.

Batch Number Tracking Technique

Quality control and traceability are vital in the health supplement industry, given the potential impact on consumer health and safety. The batch number tracking technique offers a robust solution to address these concerns. It involves allocating a unique identifier, often referred to as a batch or lot number, to each production batch of health supplement products. This tracking system allows for comprehensive traceability throughout the product’s journey in the supply chain. In cases where quality issues arise, this technique facilitates targeted recalls by isolating specific batches, preventing widespread recalls that can harm a brand’s reputation and profitability. Batch number tracking goes beyond regulatory compliance as it contributes to building consumer trust and ensuring the highest standards of quality.

Periodic Cycle Count

A regular cycle count is necessary for auditing process to ensure inventory accuracy, regardless of whether a company practice periodic or perpetual inventory. Periodic cycle count will take into account shrinkage, damage, manufacturing defects and returns to reduce inventory discrepancies. Businesses do not require to stop the operations for this type of periodic cycle count as this technique requires only counting part of the inventory. This method is also suitable for companies with large volumes of inventory that are unable to carry out regular full physical counts as it minimizes disruptions of operations. Periodic cycle count provides real-time insights for stock levels and ensures that the physical inventory matches with recorded data.


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Tan Mei Chen
Tan Mei Chen
Tan Mei Chen has substantive years of retail operations and procurement experience in the retail industry, and specifically in health supplements, organic baby foods and personal care products. She holds a Bachelor Degree of Nutrition Science with Honours and is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Mei Chen completed Diploma in Procurement and Supply Management (DPSM) on September 2023 at SIPMM Institute.
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