Maintaining accurate inventory levels is a crucial part of a business. As a result, it is important to place a strong focus on inventory and appreciate the benefits it will bring to a company. Here are 5 benefits of having correct inventory levels:
Knowledge of stock quantities
At any point in time, you should know how much inventory is stocked in your warehouse. Knowledge of stock quantities allows you to provide the customer with an item that you know have on hand. If an item is ordered and your inventory levels are incorrect, it may take much longer to acquire the item ordered by a customer.
Efficient stock count process
Whether a stock take is done monthly, quarterly, or annually, counting the inventory will be much easier if you maintain information on inventory levels throughout the year. It can become difficult and confusing to tidy it up at the end of the year if mistakes were made several months ago. Finding mistakes and keeping track of inventory levels throughout the year will make this process more efficient, as there will be clear records of any changes to stock.
Customer service benefits
From a customer service perspective, accurate inventory level tracking can help you field customer queries or complaints. If a customer complains that you have under-shipped or over-shipped their order, you can go back to your inventory levels to reference this issue. With accurate inventory levels and tracking, it is easy to find an answer and create a solution to this customer’s query.
Efficient reordering process
When you know how much inventory you currently have in stock, it is much easier to conclude what you need to order and in what quantity. Accurate inventory levels will definitely streamline the process. Instead of double checking stock in the warehouse or confirming an item was sold with a sales team member, accurate inventory levels solves this quickly and minimizes tasks.
Maintaining control of your largest assets
Inventory is a company’s largest asset. With that in mind, a lot of money and time has been invested into creating this inventory. Whether it was a developed product or a purchased product, the company’s profit is dependent on the product in your inventory. For example, missing parts can cost money to re-order or re-make and can impact the amount of time it takes a customer to receive the end product. Therefore, it is important to keep inventory levels as accurate as possible.
Since items in a warehouse are moved around constantly, it is necessary to have real-time data that helps track inventory. Cloud-based inventory management systems can help put systems in place to streamline this tracking process. For example, it can provide transparency on an item’s location and be used as an auditing tool to make sure correct counts are being taken. A cycle count is when a small amount of inventory is measured, in a specific location, at a specific time. The cycle count checks to see that the inventory system is properly working. It shows that the inventory management software quantity agrees with the levels of inventory that are actually in the warehouse.
Correct inventory levels are a vital component of a successful business and an inventory management system can help you realize these benefits.
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.