When managing a business inventory, you have to think about the different factors that affect the way you handle and store your stocks. If you get the planning of your list wrong, it would lead to several issues, such as excess inventory or instead, a deficit of goods in-store.
Overstocks cost businesses a lot. If you think you are not able to manage your inventory well, you can always hire executive search supply chain management services from companies like SCL Search Consultants Ltd. Check out the following signs that you need to change and improve your inventory planning strategies.
You have minimal storage space
Placing huge orders on different items is a great practice for business owners, as it means you should expect great returns as well. The available storage space in your facility and your expected time before making a sale, however, will affect your negotiations with a supplier. Insufficient storage space will affect the chances of your business landing better deals.
You have overstocked goods and high inventory levels
When a stock, specifically a perishable good, is in storage or on the shelf for too long, it is likely to get to its expiration date. This, then, leads to an increase in inventory. This, in turn, forces a business to offer discounts. One way to check whether or not you are overstocking is to get the ratio of stocks to the average sales you make. An increasing ratio is an indication that there is a problem.
Your system lacks integration
Efficient inventory planning cannot happen in isolation. The other things that depend on inventory planning include promotion planning, assortment planning, and management functions. The interdependency relies on data exchange to enable planning for the customers’ needs. You need to be able to forecast future orders as accurately as possible.
You are frequently out of stock
Running out of stock of your goods is not an unusual occurrence. However, when it happens time and again, it is an indication that there is a problem in the way your business manages inventory. Unavailability of goods can directly lead to customer dissatisfaction and poor financial performance on the business. A great inventory plan should be able to dictate the number of stocks you should get with guidance on the frequency of replenishing the goods. This will prevent you from running short on goods.
Your data entries have errors
If you still enter data manually, you face a higher risk of making errors. These could be due to incorrect reporting or human error. One of the best solutions here is to automate your inventory processes. Implement software solutions that will help you keep track of your stocks better and in real time. This will also allow your staff to focus more on their tasks.
Your business requires an environment that optimizes inventory management. That way, you will accomplish customer satisfaction, make business profits, and grow and strengthen your business. If you have issues with inventory planning, consult experts on supply chain management to help improve your business performance.