You’ve probably already found that as your company grows, inventory management becomes more complicated. There may even be challenges you haven’t been able to address yet, which we’ll discuss.
The first bit of good news is that you might already have good inventory control functions available in your ERP, PSA, or SFA software. Your staff can learn to use those automation features to capture lost revenue, decrease your excess inventory, and increase your customer service rates.
If your current software can’t do all that, it would be a wise investment to buy a suite that does, because the second bit of good news is this: overcoming these challenges can improve your ROI on your inventory, as well as your profit and reputation.
The 6 Challenges of Inventory Management Today
Viewing All Inventory in a Central System
The first challenge is to view every item in your inventory in one system. It would have to include products and parts located in stores, warehouses, trucks, and being used on service calls or being ordered from vendors.
“The most current best practices and trends for inventory management,” according to Tigerpaw, feature the use of “a single software portal that provides real-time, accurate inventory data at any given point or location across all departments.” Imagine if your software centralized your inventory so that every staff member could see every item on their computers and smartphones.
Maintaining Just the Right Amount of Everything
Buying more of an item than you can sell or use wastes money and hurts profit. Buying less than you need can make you miss sales opportunities or necessary customer service, lowering revenue and reputation.
The challenge is to keep the right amount of all inventory items, for which you need a forecasting function that’s integrated with accurate inventory records. Your software should keep track of current sales, orders, and inventory levels to create forecasts that avoid overstocking warehouses or running out of needed items.
Pricing for Profits
Even with perfect inventory management, incorrectly priced products can lead to lost profits. The challenge is to combine product usage data with pricing data and then to set optimal prices.
You can integrate certain ERP or similar software suites with an online pricebook that pulls prices from many different vendors. Then, when the system generates sales and usage forecasts, it can also assign each product with an optimal price that will help you reach your profit goals.
Tracking Rapidly Changing Demand
There may be many different levels of demand for your different products, and you may have a large catalog. Significantly, consumer electronics and other tech products have a lifespan that practically ends when a new version is released. Without proper planning and control, you might stock obsolete inventory and have trouble making a profit.
Your inventory software could track the lifespan of all your products, help your staff prioritize selling or using older items, and report when items have been sitting for a certain number of months with no buyers.
Keeping Enough Items in Stock to Serve Customers
Running out of certain items products or parts can cause customer service delays and dissatisfaction. Customers may complain to others, lowering your credibility, or may not buy. In the scramble to serve customers, employees might run up expenses like overnight shipping.
Different products require different lead times, shipping methods, and other details to track. Good software combines data on product usage, inventory levels, and current orders, and it helps your staff keep on top of re-ordering products before they run out.
Keeping Records in the Field
Do your field technicians or salespeople keep accurate records of every product or part they use on calls? Do they remember to turn them in when they get back? Mistakes can mean your company gives away products for free and runs out of necessary supplies unexpectedly.
Your inventory software may include a mobile app. With that, employees can access current inventory data in the field, record product usage in real time, and maybe even control it through voice commands.
Do you wonder how to keep track of inventory as you grow? Is it a constant struggle? You can take care of the most important inventory management challenges with an intuitive, automated software system.
It’s important not to waste time on outdated inventory management methods. Employees dread using error-prone, manual systems. Upgrading can improve your forecasting, customer satisfaction, employee morale, and profits.