Are you managing your inventory...

... or is your inventory managing you?

 2020-03-11 03:57 PM by
Are you managing your inventory...

With the 29th of February having marked fiscal year end for 93% of our customers, we find ourselves reminded what a destructive impact ineffective inventory control will have on a multitude of facets in a business.  Effective inventory control is relatively easy to achieve, yet many customers report that they find stock control to be time-consuming and challenging.

There are five main complaints that crop up, repeatedly.

  • My team don't know our products 

In a smaller team, it is easy to ensure that everyone in the company is familiar with the full list of inventory products, but in larger companies, this familiarity is diluted by distance and the irregularity with which some employees may need to deal with inventory.  No matter the size of your organisation, you can achieve a great deal of insight across the board by having a well-considered numbering convention across all product types and categories. Spending some time on standardising this prevents guesswork that might have led to incorrect items being either bought or sold against wrong inventory codes. 

The other major boost to effective and accurate stock processing, is the use of code scanning equipment, as not only speeds up both stock processing & periodic counts, but also ensures capturing accuracy and uniformity. 

  • We don't have enough control

We all want to hold staff accountable for the quality of their work and the security of assets within their responsibility.  However, a company can only enforce accountability if the situation is within the control of the staff member.  The stock clerk cannot be held responsible for stock items not accounted for, if any other staff member has unrestricted access to remove items from the stock room.  While we may trust the integrity of our personnel, limiting access to stock areas is usually the most effective method of ensuring improved stock movement processes.  It is more a requirement of accuracy and discipline than of enforced honesty.

This applies to system access as well. Ensure that only relevant and adequately trained personnel have access to processing functions that can affect stock levels.

  • Our processes are clumsy and we lose stock all the time

Something as simple as setting up multiple – if sometimes theoretical – stock locations can be very useful in improving stock control and accountability.  However, you should only consider this process if you can also establish a culture of discipline, otherwise you are just creating multiple headaches.

  •  We can't access useful information

Imagine not knowing if you have stock of the biggest selling item on your list and then having to decide if you can run a promotion against that item.  Your inventory control system should always be live and up to date with all transactions so that it is easy to run a report on stock levels and to trust that report to be accurate.

You not only need to know what is in stock so that you know what needs to be re-ordered, you also want to know which items are not moving so that you can devise action plans to free up that ‘dead’ capital.

Not least of all the problems lack of insight can create, is that you will invariably end up paying more than you have to when you have to make stock purchases in crisis mode. Having the luxury of time to investigate supply options before you make any purchasing decision is a valuable benefit.

  • Our inefficient processes are affecting our customers

As your business grows and adapts, so does that of your customer.  Inefficient stock control processes will undoubtedly affect your ability to provide excellent service to your customers.  Most customers will refuse to accept such a situation, leaving the customer in a position where they feel they have no choice but to look elsewhere.

Inventory