8 Common Inventory Hassles and How to Fix Them
Inventory problems are very common, but they aren’t insurmountable. Here are 8 common problems and how to deal with them quickly and effectively.
You have Too Much Inventory
If you’re nervous about running out of stock, you might be tempted to overstock. Don’t. Start with a decent projection of sales and use your tracking software to help you calculate the rate of product turnover. This helps you manage inventory risk and reduce overstocking.
You Have Inaccurate Tracking
If you aren’t tracking things, or you’re not tracking them very well, this will have a huge impact on your bottom line. Using good inventory management software will pretty much eliminate all tracking problems by allowing you to automate certain key aspects of tracking, keeping an objective database, and allowing for systematic and uniform access to the inventory by any employee authorized to have access to it.
Your Priorities Are Messed Up
If you spend too much time on product descriptions or you have inventory that’s not being sufficiently explained in the description, it will make tracking much harder. Focus on items that matter most, and put your time into these things. Make sure descriptions are immaculate. About 80 percent of your sales will come from just 20 percent of your stock.
You’re Using Spreadsheets
If you’re using spreadsheets, Stop! Just stop. Use software to help you manage your inventory.
You’ve Got No Backup
If you have no backup plan, get one. Use offsite data storage so that if there’s a robbery or a fire, your business isn’t wiped out overnight. Backup systems don’t have to cost a lot of money, but expect to pay more for better security. Some systems, like Norton Ghost or Symantec backup are good on-site solutions. Backblaze would be an example of a corporate offsite solution.
You’re Not Prepared
Are your products priced correctly? Inventory management goes far beyond specific item counts. Pricing impacts turnover! So does placement in the store. Not testing these variables is potentially leaving huge amounts of money on the table.
You Have No Audit Controls
If you’re not having your inventory audited, you’re making a big mistake. Make sure you have some type of system in place to check counters, shelves, and inventory that’s not out on display. Periodically review your complete inventory for errors, including pricing and stocking errors, as well as SKU errors and any defective products that may have made their way out onto the shelves.
You Have No Error Resolution Process
Mistakes happen. What you do about them is what counts. If you receive a shipment, and there’s an error in the counts you received, or there’s something inherently wrong about the inventory tracking, SKUs or the product itself, there needs to be a system that’s capable of sorting this out and resolving it before the items are input into your own system. Otherwise, you could find yourself in the red – errors have the potential to cost hundreds of thousands of dollars in over or under-stocking.
Max Gardiner works as an assistant manager in a stockroom. He loves to write about the things that work for him. Look for his posts on a number of industrial and management blogs.