For every inventory business, managing stock comes with difficulties and risks. From stock levels to stock condition, there can be a lot to worry about, and many small businesses spend considerable time and resource grappling with the challenges of inventory management.
Fortunately, there are ways inventory management risks can be mitigated, transforming how inventory is controlled within your business.
So, what are the difficulties of inventory management, and how can you minimise them?
A common challenge in goods businesses is accurately forecasting stock levels. Fundamental to business efficiency, holding the right amount of stock can be crucial to success.
Holding more stock that necessary is expensive and can open stock up to risks of being damaged in your stock room. In addition, stocking large amounts of inventory makes it significantly more difficult to keep your stock organised, and your inventory management efficient. Alternatively, underestimating demand can leave you with stock-out problems, leading to dissatisfied (and possibly lost) customers.
To minimise the risks associated with inaccurate forecasting, it’s crucial that you have the tools to make informed stock decisions. Automating your inventory management with inventory software can equip you with accurate sales data, which is automatically updated to avoid errors and give you the most up to date information possible. Your data can be kept in a centralised dashboard- giving you the information you need to make reliable stock forecasting decisions.
The less efficient your stock management system is, the higher chance you are going to face theft or damage to your inventory. With many businesses tying up significant capital in stock, keeping it safe is paramount to an inventory business’ success.
Theft can easily occur either externally or internally, and businesses not equipped to prevent it are likely to suffer its damaging effects. Similarly, damage can easily make much of your stock redundant to sale.
To mitigate the risks of stock theft and damage, it’s important to keep your warehouse in order. A disorganised warehouse makes it nearly impossible to identify lost stock and makes it likely stock will get easily damaged.
Cycle counting can be a useful inventory-checking technique to help you keep tabs on your inventory without undergoing time consuming stock-counts.
Not all stock management risks sit with you. Suppliers can let you down- quoting optimistic lead times and leaving you with stock-out issues and disappointed customers. Some suppliers quote longer lead times only to surprise you with a stock delivery days early. This might seem like a good problem to have, but holding too much stock can create multiple risks.
To ensure you can rely on your suppliers, use your purchase order to exactly specify a delivery date for your inventory. This ensures accountability is with your suppliers, and unreliable suppliers can be replaced.
Cloud-based software to track and manage your inventory can transform how you manage stock. Use to-the-minute, accurate sales and stock data to ensure your inventory management is optimised for efficiency. At Workhorse, your inventory management software is customisable to your inventory requirements, meaning you’ll have the right system in place to make stock management an easier, less risky feat.
To learn more about inventory management software to transform your business, read about what we do.