Keeping correct inventory records is a major management tool for any business that carries inventory. Businesses need to be able to rely on accurate inventory levels to operate and fulfil client orders. Here are some of the key benefits from accurate inventory management:
Correct inventory levels are essential for planning
By having correct inventory records, you have data that can instantly tell you whether or not you can fulfil a client’s order or take on particular projects with current inventory on hand. You understand when and if it is time to order new items. This is useful as you are able to identify trends over time improving your ability to manage and forecast inventory levels. This is crucial to planning, implementing and strategising. Keeping correct inventory records is important for maintaining relationships with investors who may be interested in underlying inventory performance. When done right, stock takes are instrumental in directing business plans. For a stress-free stock take, follow our essential steps for effective inventory management.
Correct inventory levels lead to better customer service
Having accurate inventory management systems allows you to quickly identify items and their location. When a customer has a request, you can find out the information for them efficiently. Faster response times to customers’ requests often leads to those customers getting a better impression of your company, building a positive brand image of your business. Being able to handle customer requests efficiently also leads to a flow on effect of repeat custom and positive word of mouth.
Having the correct inventory levels creates customer satisfaction, thereby increasing your bottom line. If you do not have the correct inventory levels you risk your customers going to the competition due to your inefficiency.
Out of control expense levels
Correct inventory levels can help to keep business expenses under control. In many cases, failing to maintain good inventory records can lead to expedited inventory requests. This is costly as you are paying for transportation costs, often at a premium to get the inventory more quickly. In addition, if you are ordering too much inventory, this can have an impact on warehouse spacing and obsolete inventory, resulting in higher costs overall. Having appropriate inventory levels through good inventory management helps alleviate such costs.
Getting great talent
Maintaining correct inventory levels frees up employees’ time, allowing them to focus their efforts on other tasks. This creates efficiency in your business as you are getting more done in less time. This is particularly useful if your staff are highly skilled, as their time may be better used developing the business. Some better uses of staff time may include inventory data analysis, improving the warehouse layout or identifying new vendors and product opportunities. As productivity increases, staff time is freed up to improve other aspects of your business.