Inventory management is the art of striking the perfect balance between production of goods and the demand for them, and it plays an integral role in keeping businesses afloat. Taking care of your inventory means having systems in place for overseeing, controlling, storing and delivering your products to consumers.
Creating streamlined systems to manage your inventory stock can be a challenge and there are a few myths circulating on how it should get done. Let’s break down some of the common misconceptions and myths.
Myth 1: You don’t need inventory management software
Small companies often think that their books and inventory stock are manageable with a spreadsheet or pen and paper. After all, there isn’t that much to look after right? On the contrary, inventory management software is critical for both small and large businesses. This software can streamline processes and keep inventory history in an organised and accessible space.
Moreover, inventory management software can help your business grow. With software like this in place when you are small, it sets you up to scale your endeavour. It is responsive to change and can manage bigger numbers with ease. It keeps all data in a centralised location which allows you to look back on previous reports. These reports can help with future planning and forecasting demand.
Myth 2: It can be implemented after a business has started
Many companies try to get their business underway and then organise the inventory management later down the track. Unfortunately, this can lead to delays and complications with your product. It’s extremely important that inventory management is set up before you get started. This way when goods and materials start coming in, you are already organised. If you try to implement a system after you already have a stack of inventory, it can be chaotic and inefficient. This way everything is tracked as it comes in the door and it is traceable through its entire journey.
Myth 3: It is separate to sales forecasting
Forecasting is a big part of any business as it helps them plan and prepare for the future. When predicting consumer demand, inventory management needs to be factored into the equation. With the right tools, you can look back on previous sales and inventory history. You can derive patterns with this information and use it to sculpt your forecasting.
Misconceptions and myths about inventory management can cause negative impacts on business operations. With the right software, your business can remain competitive, profitable and very informed.