Three Reasons to Keep Your Inventory Controlled

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To any inventory based business, the ability to control your inventory efficiently is crucial to operating profitably. The moment control is lost, at any stage in the flow of inventory, both productivity and profitability will nosedive.

In order to ensure this doesn’t happen, businesses today need to ensure that they exercise complete control over their inventory – from forecasting, ordering and storage to order fulfillment, packaging and shipping.

The importance of smart and proactive inventory control cannot be overstated. There are just too many ways in which poorly managed inventory can affect your business – here are the top three:

1. Riding out the rise and fall of customer demand fluctuation

If inventory managers were given the opportunity to choose one superpower, the overwhelming majority of them would no doubt ask for the power to see the future. Being able to accurately assess future fluctuations in customer demand is one of the most important and most challenging tasks in inventory management.

Accurate forecasting means that stock levels will be optimally maintained. So, if there is a surge in demand, a business should have enough stock on hand to meet the needs of its customers. This boosts revenue and more importantly allows the business to meet its customer service goals. Failing to predict and prepare for future rises or dips in customer demand leads to disaster on two equally perilous fronts.


When inventory control is lost and forecasting is made based off inaccurate data, a process manager can end up ordering in too much stock. Overstock quickly ties up cash flow, and puts goods at risk of losing value through obsolescence, dips in market retail prices, as well as theft, tampering and damage. Shelf space in the warehouse isn’t freed up either, and every day stock sits gathering dust on the shelves is another day where money is needlessly wasted.


Lack of inventory control can also lead to a business being understocked. Reliance on outdated and poorly synchronized inventory management systems often leads to forecasts that are ill informed.

When this occurs, process managers often order insufficient inventory to meet demand. Stock outs are every inventory manager’s worst nightmare; nobody wants to watch helplessly as profits drain from a business in the form of lost sales and a dissipating customer base.

2. Happy customers = happy bottom line

For companies involved in production and manufacturing, well-controlled inventory will ensure that lead times are consistently met and disruptions in the production process kept to a bare minimum. The top integrated cloud-based inventory management systems on the market today are able to convert complex inventory control challenges into simple, accurate and on-time solutions.

When a business is able to maintain and forecast accurate inventory levels of raw materials, production efficiency is boosted and customer service targets are consistently met. This is because customers receive their finished goods on time, in the required quantities and at the agreed upon price point.

3. Significantly lower administrative costs

When personnel are constantly wasting time and resources tracking down poorly labeled inventory, or inventory stored where it shouldn’t be, then money is wasted too. Even a seemingly frivolous task such as tracking down a single missing component in a customer’s order can lead to a wild goose chase capable of bringing the smooth running of a business to a grinding halt.

With an effective inventory control system in place labor costs are kept in check. Having the ability to identify, track and trace every piece of inventory that flows through your procurement, storage, and sales process in real-time – and with pinpoint accuracy – is the epitome of what inventory control is all about.

So, inventory control is not just important to a business looking to gain a competitive edge and operate at peak efficiency – it is absolutely essential. To this end, investing in a fully integrated inventory management software solution is something every business is well advised to take under careful consideration.

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Melanie - Unleashed Software

Article by Melanie Chan in collaboration with our team of Unleashed Software inventory and business specialists. Melanie has been writing about inventory management for the past three years. When not writing about inventory management, you can find her eating her way through Auckland.

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