A very important part of many businesses is managing inventory. Companies in all different industries need to have inventory in stock in order to remain afloat and deliver their products to customers in a timely manner and avoid inventory management mistakes.
Managing this inventory is very important and should not be underrated or ignored by businesses. Having good inventory management can save your businesses money and make sure your fulfillment is acceptable.
Unfortunately, there are many mistakes that companies make when managing inventory that can cost them a lot of time, money, and even customers. With that in mind, this article is going to go over five inventory management mistakes that your business needs to watch out for.
1. Inefficiencies When it Comes to Storage
Whether you have your own warehouse or have some quality storage with Cheap Secure Storage, you need to be as efficient as possible when it comes to storage for the best results. Storage inefficiencies are one of the largest mistakes companies make when it comes to their inventory management. These inefficiencies can be caused by a variety of things from a lack of planning, to a lack of communication, and even forecasting issues.
Inefficiencies in regards to your storage can slow down your fulfillment times, and can easily lead to major delays that impact customers. These inefficiencies can range from not properly labeling boxes, to not having certain items in the right place. Also, having too many storage sites can also be inefficient as tracking things down can become more problematic.
2. Trying to Handle Everything Manually
There is no doubting that automation is changing workplaces, and this especially goes for areas like inventory management. An unfortunately common mistake that some companies make is to handle things manually. Some simply don’t trust the technology, while others prefer a more hands-on approach and want full control. Doing things this way is much less efficient, and simply doesn’t need to be done anymore.
There are many solutions that exist to automate orders, track your inventory, predict demand, and so much more. These solutions save companies a ton of time and money, while also reducing the chance of human error. They work very fast, let individuals work in real-time, and use data and analytics to make logical predictions.
Sure, using these solutions may cost you a bit of money and require some training and work, but they will certainly pay for themselves over time and help your whole operation be more streamlined and efficient.
3. Not Tracking KPIs or Metrics
Another common mistake companies make in regards to their inventory management is that they don’t track things like KPIs and metrics. But why should these be tracked? Well, they essentially help to measure the performance and success of your inventory management system in general.
They will tell you what you are doing well, and what sorts of things could use a little work. Using this information, you can make the right business decisions and changes based on stats and facts, and not simply how you feel about things. This can help you progress and ensure you are being as efficient as possible with your process.
Some of the most important KPIs in inventory management include how accurate your forecasting has been, your customer satisfaction, order cycle time, inventory turnover, and many others.
4. Improper Order Amounts
A very common mistake that plagues many businesses is that they get their order numbers wrong. The last thing you want is to order too many products that you can’t end up selling, or sell products that you don’t actually have in stock. Both can lead to major issues for your company.
To avoid this, you want to make sure that your forecasting is on-point and you generally have a good idea about how much product you sell. You need to frequently check and update inventory, and keep up with any changes in demand.
Sure, you may order too much product or not enough from time to time, but you should do your best to limit this from happening.
5. Not Training Employees Well
While doing everything manually is often a bad idea, not everything can be automated and you will still need a team in charge of overseeing your inventory and how it is managed. You need to do all you can to make sure that this team is trained very well.
If you don’t do a good job in this regard, mistakes are much more likely to happen. Training takes time, energy, and money, but is a worthy investment for you to make. Inventory management systems have the potential to be confusing for new users, which is another reason to ensure people are trained well.
Also, you don’t want employees juggling inventory management and an add-on to their other duties. You should hire and train a team who will specifically focus on inventory, to ensure things go off without a hitch. The more that someone needs to focus on, the greater the chance that they will make a mistake.
In conclusion, do your best to avoid these five inventory management mistakes to keep your business running well.
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