Inventory management is important for businesses. It streamlines supply chain processes, assures a sense of accuracy, and affects overall growth and success. However, many businesses are hurting inventory management processes by making simple mistakes that increase cost, decrease efficiency, and more. If you find yourself doing one or more of these, it may be time to make some changes.
1. Not Using the Right Tools
Implementing the right technology in inventory management is a great way of becoming more efficient. Companies that have embraced the use of handheld devices, barcode scanners, SaaS supports, KPI analysis, and more have benefitted from better analysis and management of inventory. These technologies and more have made it easier for businesses to utilize multiple vendors, use limited warehouse space, and streamline distribution. Being behind on the curve of these systems and embracing the change that comes with them can mean losing out on accuracy and quality assurance, optimization of materials and resources, higher margins of profitability, and more efficient overall operations.
2. Problems with Communication
Communication between a company’s warehouse, stores, and offices is a critical part of inventory management. The numbers, automation, and forecasting tools that technologies offer should not replace face-to-face communication. Managers should always be on the same page and having conversations about what is upcoming.
Additionally, businesses that do not have a common database will easily run into problems with miscommunication. Separating inventories by departments completely may seem like the right way to go, but it is hard to see the bigger picture and leaves far more room for error. While there can (and should) still be some separation, it is important to have one database that remains whole and covers the entire business’ inventory. Companies need to be able to determine, at all times, how much is in store, what needs to be ordered, and more.
3. Lack of Expertise
Business owners are responsible for a lot of processes, and they often hire other people to do the work that they are unable to do. They recognize the value in expertise for things like accounting, human resources, and legal because those take experience and proper training to do well. But it can be difficult to see the value in that same type of expertise in inventory management. However, it is crucial for companies to hire the right people for these processes. Especially when a company has hundreds of thousands of dollars tied up in inventory, it is worth it in many cases to have a system in place run by a professional. Even when they cannot afford the expert full-time, many businesses will consider getting trained on the proper software and systems that will give them the best practices that their employees can implement early on.