6 Reasons Why Inventory Management is Important
Businesses keep inventory on hand for a variety of reasons, perhaps it is needed to quickly fill special orders, or respond to an unanticipated demand, or maybe to supply spare parts quickly. Whatever the reason, your inventory management systems are vital to responding to these market demands quickly and efficiently. If you find your inventory methods are lacking, here are some reasons why it is important.
Increase employee efficiency – It is 5pm on a Friday and a customer calls for a replacement part. They are willing to pay more to expedite it, but it needs to be there Saturday afternoon at the latest. How does your business respond? Without an organized inventory process your business will find it difficult to respond to opportunities on these and profit from them. Your employees will spend the majority of their time digging through files and spreadsheets to make sure the product is available and in stock. Getting it there isn’t the issue, knowing you have it to send, is.
You will be able to close out more sales – If you are not sure exactly what is in stock and at what quantity, an employee can tell a customer that an item is out of stock when in fact it is available. A customer can be sent to a wrong store that should have an item, but your system isn’t capable of answering those kinds of questions.
You will be able to deliver on time – When your customer orders something and is told their products will arrive between a wide range of dates, it shows your company is not organized enough to fulfill a simple aspect of selling goods. This isn’t just poor customer service, it is bad business. Instead, a proper inventory management system will give you the ability to not only pinpoint a date for delivery but gives you the means to hit that target.
It is clear where your inventory is – It may seem like good customer service when one of your locations is out of an item and calls another to see if it is in stock there. On the surface this appears to be going the extra mile to help a customer, but the real issue is your system doesn’t allow them to know for certain that the item is there. A good inventory system will allow them to see this in real time and respond accordingly.
You will be able to order the correct amounts from vendors – Reorder points can be sent with ease when you have a solid inventory management system. This reduces cost when you are ordering things unnecessarily either through not knowing how much you have, or not ordering enough.
No need to duplicate purchase orders – A sophisticated inventory management system will either generate purchase orders automatically when your inventory levels hit a reorder point or allow you to create one from drop down menus which lowers the potential for errors.
Even small businesses that keep a minimal inventory on hand would benefit from even the most basic of inventory management systems. Presort can help you find the right software and implement the right procedures to make sure that this aspect of your business is a strength and not a weakness.
