Be it retail, manufacturing, or construction industry, managing inventory is a crucial part of every business. No matter where the inventory is located (warehouse, manufacturing unit, multiple locations or consignments to be drop shipped from the suppliers), staying on the top of your inventory is important. It not only helps you meet the diverse customer needs but also helps you remain more profitable. As your business grows, the customers’ demands fluctuate and so, you require the best practices to manage your inventory in order to remain competitive.
Here are some of the common inventory management challenges and solutions:
1. Lack of inventory visibility
Do you have difficulties in locating the stocks in your inventory? Do you have a problem locating the goods on time? It could have a negative impact on your brand reputation. An inaccurate or incomplete inventory leads to limited stock visibility, resulting in delays in shipments, which can ultimately lead to customer dissatisfaction.
When you get a custom inventory management software built, you can get real-time access to inventory regarding availability of stock, location of goods, and more. Easy location of the inventory will help you with better order fulfillment and greater customer satisfaction.
Have you purchased new products even when you have a few unsold materials at your warehouse? Overstocking can affect your profitability as it hampers the cash flow. As the money gets locked in the stock, it is important to focus on selling the goods that are stored in the warehouse before buying the new ones. Overstocked items occupy storage space too and can add up to the overhead costs.
If you are not able to deliver the goods on time, you could be losing a lot of customers. What would happen if the customer places an order at your store and once you get the notification for the order confirmation, you get to know that the product is out of stock? Either you would have to reorder the items and customers may have to wait for the order delivery or you may have to cancel the order. Customers are likely to get irritated in both the scenarios. Nobody would like to wait longer than 24-48 hours to get the item delivered at their doorstep after the order is placed.
Knowing how much inventory of a product you would need based on the customers’ demands is one of the biggest challenges of online inventory management. Unavailability of goods may lead to cancellations of orders that may frustrate the customers. Understocking may lead to wastage of storage space at the warehouse. By proper inventory management system, you can prevent understocking by ordering the right goods at the right time.
4. Managing warehouse space and efficiency
Another challenge for any business is managing their warehouse space and making the optimum use of the available space. It is important to design and plan the storage space well to make the best use of space. You need to arrange the goods in a proper manner so that they can be dispatched easily when orders for those products are placed by customers online. With the right inventory management software, you can manage the warehouse space efficiently.
5. Dead stock
Do you have a lot of dead stock at your warehouse? Is the dead stock occupying a lot of space at your premises? Dead stock is a burning problem for small businesses to large giants. A lot of agencies complain about having piles of goods that are not sold over a long period of time. Dead inventory occupies the warehouse space endlessly. People who buy large quantities of products without checking the market trends may end up having dead stock at the warehouse. In some cases, forecasting goes wrong and business owners have a lot of dead stock.
Defective goods, over ordering goods or poor communication are some of the major reasons for dead inventory. If you want to get rid of dead stock or don’t want to get into such a situation of having dead stock at your premises, you should plan effective strategies to remove it. You can try bundling, offering discounts, donating, or returning the goods to suppliers to get rid of the dead stock from your warehouse.
You need a custom inventory management solution to provide enhanced visibility, transparency over the goods, get detailed information about the goods, orders, sales, and you can predict the need of stocks. With the help of a tailor-made inventory management system, you can track the incoming and outgoing stock to meet the ever-changing demands of the customers. As the personalized software would be built to satisfy all your unique business needs, you can be assured that it will be a comprehensive solution for enhancing your business profits. When used correctly, it will help you streamline your business operations and manage your inventory in a proper way.