Whether you are a start-up or an established small business, growing your company is a challenge. In fact, close to half of small business owners, polled in the 2017 State of Small Business Report, said increasing profits was one of their biggest obstacles. And since 43 percent of those surveyed admitted to using outdated manual processes for inventory management or not tracking inventory at all, that challenge could be due to lacking the right tools to accurately track important operational information.
Does this sound familiar?
You have to look in more than one place to collect important data. Or perhaps it’s normal for you to spend countless hours sifting through piles of spreadsheets to manually generate reports. Don’t become a statistic like your counterparts. As you need to report to shareholders or to simply track daily operations, a centralized automated inventory management system is an essential piece to the business management puzzle. Turn your current situation into a strength as you implement a more effective way to track inventory.
Especially if you’re in the following markets, the road to a more profitable future starts with inventory management.
Food distribution and service
When you work in an organization that relies heavily on food on a daily basis, such as supermarkets, schools, and restaurants, inventory management is crucial. Spoilage needs to be prevented, and there is a very fine line between having too much and too little food.
“Food and supplies purchased, but not immediately used (inventories), often represent a significant portion of operational revenue,” according to the National Food Service Management Institute’s Inventory Management and Tracking Reference Guide.
Further, the guide states that “one classic method of controlling food cost is to maintain inventory levels high enough to ensure menu items can be produced in the right quantity, but low enough to not have excess product sitting in storage.”
In most industries, excess stock is more of an inconvenience. However, when the food distribution industry keeps too many products in stock, it not only means a lot of wasted money when inventory spoils and has to be thrown out, but potential health concerns could be a big problem.
Conversely, a lack of inventory can also set you back. The inability to accurately forecast demand means your customers won’t receive the ingredients, food products, or supplies they need. And it certainly hurts your reputation when customers don’t get what they need when they need it, and satisfaction drops.
In the food service and distribution markets, you always deal with budget constraints and changing regulations, and inventory control plays a big part to manage each facet of your food business.
Ecommerce businesses are very unique when it comes to inventory management. Very few physically maintain their own stock and if they do, they may choose to dropship. Additionally, online businesses differ in scale and operations. One business could operate out of massive multiple warehouse networks, while another operates out of the owner’s basement. Ecommerce businesses also struggle with global distribution, having to process orders around the clock.
Bottom line: if you run an Ecommerce business, it all comes down to choosing the right inventory management platform to cohesively synchronize inventory across multiple channels and provide real-time updates for top-down visibility.
In any of these Ecommerce challenges, the maintenance of accurate records and inventory management is vital to keep the business running successfully.
Inventory management can be tricky, especially if you run a company in the consumer goods industry. Why? Because forecasting is volatile due to seasonal changes. Every few months, customers demand change thus inventory needs changed. As mentioned earlier, nearly half of small businesses either don’t use automated inventory systems or don’t track stock at all Ironically, 69 percent of company vice presidents say inventory optimization is a top priority in their organizations, according to a recent study, Inventory Optimization: Still a Supply Chain Priority. This is primarily due to the need to improve customer service.
Related Article: Inventory Management Tips for Creative EntrepreneursAnd there is a large opportunity to do so through inventory optimization, which in turn improves your company’s supply chain as well as customer satisfaction.
If your organization is in the electronic devices field, inventory management (or lack thereof) could make or break your business. Technology products can be pretty pricey, with some units costing upwards of hundreds or thousands of dollars. And if you don’t have an accurate handle on your inventory, it could result in either under or over-forecasting. Both of which could be incredibly costly.
Inventory management shouldn’t be ignored
Not matter what type of business you’re in—food distribution, ecommerce sales, consumer goods, or electronic devices—inventory management shouldn’t be ignored. In order to grow revenue and keep customers happy, inventory management needs to be a top priority. Perhaps you’re using a manual inventory system because that’s how you’ve always done it. But in order to succeed in today’s marketplace, you need the right tools to not only monitor inventory levels and demand, but to accurately report, manage financials, track customer buying habits, and more. All of these can be utilized through an inventory management system to establish a sustainable business.
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