Keeping a close eye on inventory should clearly be a priority for anyone whose business carries stock. Unless your business is in the service industry, your stock is what allows your business to trade and generate income – and for some businesses, inventory is the biggest asset on the balance sheet. Let’s talk about four ways that taking control of your inventory is a crucial step towards doing business better.
It reduces the risk of running out of product
Without an accurate picture of your inventory it can be difficult to have confidence in dealing with customer enquiries and orders. Knowing what stock you have in the warehouse, what stock has already been sold and what stock will arrive soon is crucial. Good inventory control enables you to proactively manage your inventory, ordering stock in response to changing stock levels rather than reacting to a surprise shortage. A business cannot sell goods if it does not have (or will not have) the stock in time, so being able to view accurate and up-to-date stock information significantly reduces the risk of failing to close a sale. If you’re a manufacturer, careful control of inventory prevents you running out of raw goods – it’s the difference between smooth production and stopping work while you wait for a delivery of a key part or materials.
You can avoid overstocking
Of course, the flipside to running out of stock is holding too much of a particular item. This often occurs where businesses have a fixed order of certain products and one or more of these products is selling more slowly than it is being ordered in. By implementing a more advanced inventory management system, you can avoid carrying too much stock.
A good inventory management system like Unleashed will allow you to pick out top sellers as well as the products that are not selling as well by reference to inventory turnover data, enabling you to adjust ordering to suit. Moreover, because you can monitor stock levels and order proactively, less safety stock is required as a buffer against stock shortages – freeing up money to be invested elsewhere in the business.
You can see where every item is at all times
A best in class inventory management system will create visibility over all of your locations – this means that stock is less likely to get lost between sites. It means that your staff does not need to call different branches looking for that one last item to fulfill a customer order – the location of every item of stock should be visible in the system.
Staff productivity and morale are increased
Without a well-developed system and processes for inventory control, your business must pay staff to manually develop an answer or solution whenever there’s a question about inventory. Manually counting stock, handling stock repeatedly and trips to the warehouse to check inventory information can all hinder your business’s growth. Investing in inventory management shifts the burden of routine inventory reporting off your staff – freeing them up to focus on other areas of the business. Staff morale is also improved as team members spend less time carrying out manual processes and more time on tasks that add real value to the business!