Whether you are running a restaurant or a pharmacy, inventory management is a central part of your business administration and management. Having control over inventory allows the company to provide an excellent customer experience and improve the efficiency of supply chain management – all of which impact customer relations.
For these reasons, it is essential that you have good inventory management. Why does it matter? First of all, good inventory management makes conducting economic order quantity (EOQ) estimations easier and more efficient. The said technique helps to find the best cost-saving approach for placing orders, resulting in cost reduction in storage provision and management. Having accurate forecasts also helps to decrease the risk of unreturned investments. You can easily monitor the number of sold items and estimate future sales for maximum profits.
Preventing stockout is another advantage of having control over your inventory. Inventory management lets you monitor stock levels and sales from multiple channels as well as order the right stock numbers to meet customer demand. Accordingly, your ability to process and manage orders and storage space also improves, benefiting your team’s productivity and the workflow’s efficiency.
That said, there are common inventory management mistakes that many business owners make and ignore. Here are some red flags to look out for and how to fix them.
1. No KPIs
The lack of Key Performance Indicators makes it impossible to measure the performance of your inventory management. Consequently, it becomes harder to identify and address issues that can hurt the company’s workflow, productivity, and profits.
This issue can be fixed by implementing indicators to keep track of performance levels. The insights allow you to identify and optimize underperforming departments and set realistic goals to push profit. For instance, you can track inventory movement and measure it against customer satisfaction and delivery on time.
2. Overordering or overselling
Not being able to fulfill customer demand due to the lack of stocks can hurt customer satisfaction and decrease loyalty. On the other hand, overstocking your inventory with products that don’t fly off the shelves can rob you of precious storage space and might even result in stock loss due to expiry.
The solution to this problem is to use retail inventory software to get real-time insights into your stock levels. Conducting regular inventory stocktakes also keeps the data in your stock and inventory app accurate for inventory forecasting, minimising the margin of error.
3. No system for inventory counts
Not having up-to-date inventory counts prevents you from monitoring stock levels and stock availability and fulfilling orders efficiently and accurately. As a result, key stakeholders will not be able to make sound business decisions, resulting in financial loss and inefficiency in the inventory workflow.
Using retail inventory software with barcode scanning features can help you conduct inventory counts faster and more accurately. The stock and inventory app minimises human error and frees more time for your team to do their work.
AdvStock offers a self-service small business stocktaking app that is easy to use and cost-effective. Our stock and inventory app is capable of capturing data in real-time and producing various types of reports, giving you better insights into your inventory.
We release our small business stocktaking app in Android and iOS versions. Additionally, AdvStock offers stocktaking apps for convenience stores, stocktaking apps for food and beverage, stocktaking apps for pharmacies, and stocktaking apps for bars and clubs to cater to different types of businesses.
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