Common Inventory Mistakes You Don’t Want To Make
Inventory is a huge aspect of any business. It can be the reason for profits, or the reason for losses. Improper tracking of inventory can turn assets into liabilities. Properly managing inventory can be difficult, it is challenging to determine the best way for you to keep track of inventory. In order for a business to stay accurate and up to date with their inventory, below are three of the biggest inventory mistakes managers are making today.
Failure to Forecast
How can you forecast for the future if you don’t know the current levels of your on hand inventory? You can’t! It is essential to know what your future demands may be, therefore you must forecast. If you have been properly tracking your inventory for a long period of time, it makes it a lot easier to look back and find out what your future demands may be. For example, if you just assume that everyday you’re going to sell 10 grape sodas, but in actuality, you sell a completely different amount each day of the week. Friday, Saturday, and Sunday you’re making more sales of grape sodas, the rest of the week you’re barely selling any. This is important information to know when you make orders. If you’re getting orders on Wednesday, after the weekend you may not have any sodas left in stock after a busy weekend. Forecasting this information is so important.
Knowing the trends and what you’re selling more of on which days is going to give you a better chance at meeting demand, which will then lead to more profits. It is easy to forecast once you have previous information on other sales. This is going to help you out a lot in the long run of your company and make ordering very simple.
If you are still using pen and paper to track your inventory, you’re doing it all wrong. You need to have a real time inventory management software that will allow you to be completely accurate and up to date with all your inventory. An automated system will allow for multiple users to have access at any given time, at multiple locations. Automated inventory gives you real time data and makes it very simple to find errors or to update amounts.
Automating your process will cut tremendous time when it comes to taking inventory. It will also allow you to find your biggest wasters and find where you need to make improvements. An automated systems will save you tons of money in the long run as it is so much simpler and g=can give you accurate information that you can;t get from a manual paper count.
Unqualified/Improperly Trained Employees
Inventory can be a tedious task for employees at any kind of business. It is important that whoever is taking inventory is doing it correctly. Often times, employees may not be trained properly or may be unqualified for inventory. The lack of a formal training on how to take inventory from the start of the employees time with the company can lead to them making mistakes into the future. This can lead to inaccurate data that may have a huge impact on the company as a whole.
In order to prevent this, it is important to set up a formal training session for all employees who may be taking inventory. It is important for them to be able to have guidance and assistance when they take inventory for the first couple of times until they become familiar enough to confidently do it themselves. Three important things to remember when it comes to having the right people take inventory are hiring the right people, holding inventory managers accountable, and, as stated above, emphasize training from the start.