3 Inventory Management Mistakes You Need to Avoid
Inventory errors are more than an inconvenience. They can be result in lost business, disgruntled customers, and low morale of your work force. Here are a few of the issues you might face and some helpful solutions.
Inefficient Inventory Tracking
Poor Performance Measures
Business owners may know that they have inventory management issues, but they might not know how to fix them without the right data.
The solution is to measure inventory fill rates daily and regularly measure inventory turns. The warehouse staff must be able to effectively track what’s coming in and going out. Develop a data-collection program that realistically forecasts errors. Obtain inventory management software that tracks sales, material purchases, and production processes in far less time. The software does away with the cumbersome pencil-to-paper process and lets employees better use their time to model inefficiencies and improvements.
Inability to Meet Customer Needs
Customer retention is important no matter the size of your business, so you’ll need to know what your customers want and keep those in-demand products on the shelves. Business owners who don’t use a proper tracking system have more trouble understanding inventory on hand, backlogs, or lack of product.
For these reasons, using an automated inventory reporting system is essential. Eliminating manual data input saves time and money, and it redirects resources to more pressing issues. Automated systems make it easier to track inventory, work in real time, and provide easy access to data. This results in a better customer experience.
Not Planning Properly
You’re a business with an important sales period upcoming, but there’s a problem — you didn’t order enough product and could now miss out on a big sales opportunity. Planning errors can cause a loss of sales and profits.
You can avoid this unpleasant situation by investing in an inventory management system. These systems sync inventory with sales, making it easy to see what’s in stock. These systems also automate re-ordering, sync with accounting to track cash flow, and improve forecasting and planning.
Poor Communication and Employee Training
Sales may be great, but if fulfillment doesn’t know about the increased product demand, there won’t be enough product to fulfill new orders, resulting in a customer service nightmare. The reverse is also true — if business decreases, failure to communicate will result in excess inventory and warehousing costs.
To prevent these issues, create a communication workflow among departments. Clearly state what information needs to be communicated, when, and to whom. With tools available like email, texts, and other instant group communications, discussing important issues should be a breeze.
Employees Can’t Manage Inventory
What if you’ve hired well-meaning employees, but they’re struggling with inventory management? You don’t want to risk your company’s ability to get product to customers, so make sure all employees are trained to use your inventory software. Clearly identify the person in charge of inventory, and most importantly, hire people with strong backgrounds in inventory management.
Avoiding these mistakes can save you time and trouble. And if you already have one or more of these problems, following these tips can help your business get back on track.