How to avoid these Common inventory mistakes that are costing to your Company?
Mistakes in inventory can cost you a lot, but still many of us tend to make some mistakes and end up losing money.
So, why to learn from your own experiences at your expense, when many have already lost to teach you where you might err and how to avoid it.
In this article, we would highlight some of the common mistakes that business owners do in inventory management and how you can avoid such mistakes.
1. Not using right technology
What is the sense of doing all things manually when you can employ technology?
Many business owners think it is still okay to use age-old manual methods to manage their inventories and consequently, they end up losing time and money in doing so.
We have best of technologies to manage your inventory and solve problems for you. Those who still rely on manual methods tend to employ manpower and resources that cost them a lot and still not as fast as when it is automated.
Using excel sheets can give a serious blow to your money and be absolutely worthless.
2. Not Employing appropriate resources
You have the right technology to manage your inventory but do you really have an employ who is professionally qualified to use that technology and get the work done flawlessly?
If you are cutting cost or you are not mindful of getting a trained employee onboard then you should reconsider immediately and see how it is making things suffer.
Right technology which can be fully utilised by an experienced resource would be the best decision.
Even the inventory management software companies give an elaborate training to the employees, but you need to check if either they understand it completely and utilise the technology to its best or get an employee who has a proven track record in same technology.
3. Plan and Forecast
Though it is not possible to predict the demand with full accuracy but one has an option of turning back pages and analyse the previous years demand and plan out for the coming year.
It is very crucial to understand the pulse of your customers and have a feel of your market demand and supply.
If done properly you can save money in multiple ways.
a. You have zero bounce back due to unavailability of stocks.
b. Repeat purchase due to variety of options available according to customer’s choice.
c. Customers tend to leave shopping sites which always runs out of stock and they feel their time got wasted checking across for their favourite products.
d. No one likes waiting in this fast paced world. They have many options and reasons that they easily move to a better site where they get more options and stocked inventory.
4. Control Supply
Keeping demand in sight will help you control your supply in advance. Advance planning and fulfilment of supply helps save money by:
a. Avoiding the last minute purchase at higher price
b. Not in a position to check with multiple vendors and negotiate the best prices
c. Not being able to keep up with the quality many a times due to the hurry and hassle.
Keeping a check on inventory managers and control any kind of theft or mishandling is also par important.
To avoid unethical practices for inventory, technology like CCTV and software which can detect and warn about depletion shall be installed.
Warnings should be immediate and policies shall be firmed up to take stringent actions against any such happenings so that there is an a surety of not any such repeated phenomenon in near future by other co employees.
6. Maintaining Vendor Relationship
A dependable vendor is the backbone of inventory but unfortunately, it is difficult to find one.
It is always a good idea to have a pool of vendors from whom to purchase on an alternate basis.
It will ensure you good rates and also you will not be dependent on only one vendor for your supplies fulfilment.
Timely payment and good credit record will keep you in good books of vendors and in times of urgency or any demand slash or surge you will have an advantage of cooperative vendors to meet your demands.
Mismanagement will eat up all your efficiency and productivity no matter what amount of efforts you put in making things fruitful.
If it consumes more time to look for a product or replace a moved stock or bring forward the stock lying there since long then it is a huge road block to your distribution channel.
You should have a proper plan with specific time allotted for all kinds of stock and their placements to move them as soon as you can.
Dedicated storage areas with well defined and marked label are crucial for saving time and money and avoid any mismanagement at the warehouse.