31 May 7 Little-Known Facts about Retail Inventory
Any business that supplies products should understand the importance of efficient inventory management. Failure to keep track of what you have in stock could lead to unnecessary expenditures or dissatisfied customers. But as important as managing inventory is, most managers have trouble getting it right.
From utilizing the wrong external factors to make forecasts to missing common human errors, many managers face an uphill battle when managing their inventory. Although there are a lot of reasons why people mismanage inventory, lack of knowledge for its importance is often at the top of the list. Below are a few facts you were likely unaware of about warehouses and inventory management:
- More than a trillion dollars is tied up in inventory.
Inadequate tracking, poor forecasting, and even human errors could leave you sitting on a ton of inventory that you don’t need and can’t get rid of. Unfortunately, this happens more often than not to small businesses simply because they fail to set up an inventory management system to monitor what they have in stock. Inventory that sits too long ends up selling for a lot less money, which ultimately reduces your profit.
- More than 40% of small businesses currently do not track their inventory at all (or utilize manual methods).
Small businesses seem to fail from inventory control more often than larger organizations, and the reason is simply because they don’t track their inventory at all. They also use older methods like manual entry, which can increase the frequency of human errors and throw off forecasting.
- Human errors are one of the biggest issues with inventory control.
Aside from not having a clear inventory management system, one of the biggest issues with inventory control is human error. When utilizing manual methods or inadequate platforms like Excel, you’re leaving a great deal of responsibility in the hands of your staff. Entering the wrong information, or even omitting certain information could throw off your entire management system.
- Barcodes help to improve tracking and human errors with inventory management.
Warehouses and other small businesses with inventory have started adapting to the barcode system. Barcodes are essential for tracking products from the time they enter the building until they are purchased by a customer. Many barcode systems can be integrated with inventory management software to reduce the amount of human errors, thus saving your business time and money.
- Customer satisfaction is an external factor that impacts inventory management
Many forget to factor in customer satisfaction when forecasting inventory needs. The truth is, if the customers are not happy with the products or service you’re providing them, the demand for your business will go down. Basing your inventory needs on other factors without thinking of the people who purchase the products in the first place is a nightmare waiting to happen.
- Many warehouses have moved their inventory management systems to the Cloud.
Cloud-based inventory management systems are becoming increasingly popular in the warehousing industries. They provide safe, efficient, real-time results that make it easier to track and manage inventory.
- Poor inventory management could cause a small business to fail.
If you’re not doing a good job of managing your inventory, eventually your business will fail. Not having enough products in stock means that you’ll have dissatisfied customers and a ruined reputation. Having too many products in stock causes you to waste capital and could force you to sell the influx for way less than its worth.
So what do all of these facts mean for you and your small business? Bottom line: inventory and warehouse management are essential. It’s becoming increasingly important to manage inventory effectively, and it’s also interesting that the best method for managing cash flow and staying competitive is to invest in the right technologies to assist you. Educating yourself on the newest inventory-tracking technology and learning what your business needs to stay organized is key.