4 of the Most Common Inventory Management Blunders (and How to Stop Them)
Written by Katie Conroy
If you own a goods-based business, you know that the core of your business runs around inventory. In its most basic sense, your company offers products to customers, and how much you sell will determine how successful your company is. Though it sounds easy enough, there’s nothing simple about this process.
Solid Management = More Sales
In order to achieve healthy sales over time, your company must offer products that your target audience wants, you must deliver the right items to each customer, and you must minimize excess inventory that is wasting warehouse space and employee hours.
This is where inventory management comes in. How well your business manages inventory will play a major role in sales, which will determine the state of your business. Business 2 Community explains even some of the most successful businesses have mismanaged inventory, and they experienced catastrophic consequences. To help your company succeed, here are four of the most common inventory management mistakes and advice for preventing them in the future.
1. Shutting Down for a Day
One common mistake that companies make is spending full days to count inventory once a year or once a quarter. This not only can cripple your profits, but it also makes it hard to identify specific issues that you can correct when you’re reviewing such a long timespan.
Instead of shutting down your business for a full day (or more) to check inventory, opt for shorter, more frequent inventory checks. By using cycle count inventory auditing, you can stay more up-to-date on your inventory by checking it on weekends or evenings.
2. Tracking Manually
Businesses everywhere used to track their inventory manually. That was a long time ago. Automation and electronic tracking is now more accessible than ever to companies of all sizes, and it’s an essential aspect of inventory management if you are to experience ongoing success.
Not only will automation and management software help you to more accurately track inventory, but it will also improve workflow, shipping, scanning, and other elements. Plus, implementing good software will reduce the workload and stress of your inventory managers. Robocom WMS, 4SIGHT Warehouse Management Software, and mobe3 WMS are all inventory management software solutions and tools worth considering.
3. Wasting Time in the Warehouse
You might be surprised by how much time (and money) can be wasted when warehouse workers have to search for an item to pull out of inventory. Fortunately, Chron notes this problem can typically be solved by a simple rearrangement of products. Review your sales reports to determine which items you sell the most of, and arrange your warehouse accordingly. For instance, designate the spaces closest to the shipping area for your most popular items.
4. Failing to Train
Nothing can bring a business down quite like employees who are not equipped to fulfill their roles. And much of that responsibility is up to the business owner. Here’s the thing: traditional means of managing inventory are more difficult to learn and implement, especially for employees who are new to the system. What’s more, even for seasoned inventory managers, human error is inevitable.
Training an employee to use inventory management software, particularly one that is cloud-based, is a relatively simple process. Nonetheless, you still have to take the time to ensure anyone who is dealing with inventory is adept at using the system.
Every company in the world is susceptible to inventory mismanagement, but every company can also take steps to improve its inventory management. Remember to do short inventory checks regularly, and embrace inventory management software that can revolutionize your operations. Also, arrange your warehouse to be more efficient, and be sure to train your employees sufficiently. In no time, you will likely see major improvements in your company’s inventory management and, therefore, experience greater overall success.