One of the biggest challenges faced by businesses, especially SMEs, that come up time and again is the inventory management issue. Hard to digest, but the fact is that an inefficient inventory management can ruin your business growth. Inventory related mistakes can increase operational costs and affect the inflow and outflow of products thereby disappointing your customers and subsequently frustrating your employees. Read below the common inventory mistakes to avoid and how.
- No inventory check
Inventory check is a pain but a necessity. It requires you to count every single item in your warehouse. This activity should be performed on regular basis. This tedious task might even require you to shut down your warehouse for a day or get your entire team to gather at the warehouse and stay late to complete this task.
What’s the better way: Take individual sections and count one per day instead of doing it all in a single day.
- Wrong forecasting of stock required
First and foremost thing to look for in the warehouse is the right stock keeping for all items. You cannot make wrong forecasts. You always need to have the right amount of inventory in your warehouse. Purchasing and storing too many items can affect your finances as everything won’t be sold out and you will have to suffer from dead stock that cannot be consumed but wasted. Also, staying too low on stocks will eventually upset your customers on not receiving the products on time. Transferring this frustration to your employees will take your customers to your competitors.
What’s the solution: Go for automated inventory management.
- Not aware of new technology
Manual process or maintaining excel for stock management will not work in the long run and this daunting task will gradually affect your business revenue. In this tech-smart era, you cannot waste your precious time and money fixing such things that can lead to the above-mentioned issues.
So, opt for automated service that provides real-time data. You will have accurate data of what’s in stock and what needs to be purchased. The report will help you help you understand your consumers’ behavior and buying habit to decide on the stock level required.
How does it help: It helps you have happy customers and get word-of-mouth marketing for your business. You have an accuracy of quantity, material optimization, the convenience of performing different operations and profitability.
- Hiring wrong employees
Hiring the wrong candidate for a task is one of the biggest mistakes you can make for your business. For inventory management, you need to have efficient and trustworthy employees that do not require an everyday hand holding. All your employees should be offered a thorough training on Day 1 of joining your business.
How to do it right: Hire the right candidates at the first place who have the required experience. Then, support the inventory managers and place trust on them to train the new hires and get the work executed.
- Inappropriate Warehouse setup
Last but not least, another important thing to consider for inventory management is the warehouse setup. Everything in your warehouse needs to be placed systematically to minimize shipping, material handling and packaging errors. Ultimately, you save a heap of time and money.
How to do it: Place the highest selling/bestselling products and empty boxes near the packaging counter. Also, go for a mobile tracking on what is kept where. Keep your warehouse checklist handy to minimize operating costs. This will have all details of your storage systems, lifting equipment, packaging essentials, etc.
Avoid the above-mentioned inventory management mistakes and grow your business exponentially.