Inventory management is such an important part of business. It enables the smooth progression of inventory stock all the way from receipt, to manufacture to the storeroom and right into the customer’s waiting hands. Let’s look at what not to do when managing your inventory.
Spreadsheet? Tick. Job done
A big faux pas in the inventory management game is to think that an Excel spreadsheet, no matter how ‘smart’, will cover you and support the business in correct inventory stock management. Unfortunately, reliance on the spreadsheet will simply result in more issues as it cannot possibly update data in real-time and it is unable to integrate into some systems you may have such as a sales system or ordering system. This means manual entering of information is required, not only tying up precious staff time but also creating the opportunity for errors. Believe it or not, downloadable inventory software is not that difficult to obtain, install and learn to use, and there is help and support available every step of the way.
How many times have those three dreaded words appeared on your screen? It is intensely frustrating to be stopped at the point of ordering something you have researched and decided is necessary, because the product is not available. Could they not have stated that from the beginning? Large retailers who place all the emphasis on high volume sales but do not pay attention to what is going on in the background (i.e. their inventory stock) are culprits of this message to their customers. Inventory stock needs to be appreciated and looked after rather than just assuming more money from more sales until all stock is gone is a valid way of doing business.
Sales data is everything
As tedious as number crunching and data can be, it is the key that unlocks knowledge and therefore informed business decisions and ultimately improved processes. Too many business focus on sales data to manage their inventory stock rather than considering all aspects of inventory, not just its ultimate sale. Flip the coin on the head and rather than looking to sales to drive inventory management, consider how correct inventory management can drive sales. This places the company in a proactive position rather than simply reacting to sales volumes.
Nothing bad will happen
One of the reasons for accurate inventory management is the protection of your business from stock outs, defective products and losing money due to adverse events occurring to inventory stock. These are several more factors affecting inventory and to avoid the detrimental consequences they can cause, correctly calculated safety stock levels are required. These days, nothing is certain and anything can happen so it is of paramount importance to be able to protect your company as much as possible. In order to calculate these values correctly, the correct information needs to be obtained, which is only truly possible through inventory management software.
It is only the warehouse guy’s job
With total quality management, and any aspect of company life that focuses on quality and improvement, it should be adopted by all levels of the company for proper implementation and to reap the full extent of its benefits. Inventory management is quite the same, it is not just the warehouse guy’s job. Busy and tired production staff might just assume that their only responsibility is their little area and that someone else will ensure inventory stock values are entered correctly at every point of the production process. Inventory management and accuracy is part of everyone’s role.
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.