Managing your inventory efficiently is so important, but you will run into problems if you make the mistakes highlighted below. Most of the issues eventually result in lost capital and space, so it’s essential to have your inventory well under control.
But if you encounter inventory management problems in your business, they can be eliminated with comprehensive inventory management software.
Checking Inventory Infrequently
Many companies stop operations for a day per year to check their inventory against what is listed in their software system. However, ceasing operations for an inventory count for that long is considered to be unnecessary by many industry insiders.
Instead of doing an annual count, consider doing a cycle count regularly throughout the year. Cycle counting is often less disruptive to company operations and doesn’t take as long.
Additionally, it’s easier to find counting mistakes with less time between each inventory. Finally, making your inventory check a routine part of your day or week makes the job less daunting and more accurate.
Improper Communication And Training
People who use and execute your inventory system need to understand it well. There are many downsides when you give someone lacking inventory system knowledge too much control over it. This means anyone who controls the inventory system must have thorough training before working on it.
There also should be more than one person dealing with product inventory. If the person who is in charge isn’t around, you won’t have essential information when it may be needed the most.
Additionally, inventory system implementation needs to be stable and consistent with every employee. This will prevent expensive confusion, mistakes, and error in counting. That’s why open and regular communication is vital – not just between inventory employees but everyone.
For instance, if the marketing department doesn’t know you’re short on a product, they may sell something you don’t have. And shipping delays lead to canceled orders and lost revenue.
Lack Of Organization In The Warehouse
An inventory check can go from a manageable task to a nightmare if the warehouse or stockroom is disorganized. Employees may stick inventory wherever there is room without considering whether that’s the best place.
Disorganization often plagues small businesses that suddenly have many products in the warehouse. Fortunately, carefully labeling shelving and other common organizational methods will keep the storeroom or warehouse orderly and easy to handle when time to count inventory.
Also, employees who deliver the inventory into the storage area must put the right products in the right spots, so your inventory system is tidy.
Further, you should think carefully about where you put items. For instance, it’s logical that the best-selling products need to be highly accessible. Conversely, products that sell slower can be placed in more remote locations.
If your company uses Excel spreadsheets and other manual methods to track inventory, you lose time, money, and effectiveness. Plus, manually counting inventory inevitably leads to errors that cascade and create more errors.
Fortunately, using an automated inventory system with automation can optimize company operations, saving time, resources, and money. Employees see immediate inventory updates and data access.
Overordering Or Overselling
Your business is doing great, and orders are pouring in by the hour! You offer high-quality products, and customer reviews are outstanding. But then, a customer orders a popular item, and you don’t have any more inventory. Now, you’re oversold!
On the other hand, what if you have an item that has sold poorly for months, so you have too many products not moving out of the warehouse. You over-ordered, in this case.
These are two common inventory issues, but both come down to poor planning and foresight. Some ways you can remove these problems are:
- Implementing process automation for accurate inventory counts.
- Barcode scanning for real-time inventory counting and checks.
- Inventory forecasting for more accurate and efficient inventory decisions.
If you avoid these frequent inventory management mistakes, your organization will be more profitable and efficient over the long run.