While your merchandise may be what attracts customers to your business in the first place, if you don't have a firm grasp on inventory management, your customers aren't likely to stick around. Here are five common inventory management mistakes and what to do about them.
1. Problem: Too Much or Too Little Inventory
If you run out of inventory, your customers will buy from your competitor, and if you have to much inventory, it will cost you more to store it. Use data from previous sales periods as well as your knowledge of the latest trends for proper inventory management.
2. Problem: Inefficient Use of Space
If your warehouse isn't organized for efficiency, your process will be slower and you'll lose profits. Streamline your inventory management process by keeping items that are frequently shipped nearest to the door.
3. Problem: Lack of Communication Between Locations
One of your customers hasn't received her package. Where is it? If your locations don't have a way of communicating, you have no way to know. Make sure all of your locations and companies along the inventory management chain are in constant communication.
4. Problem: Inaccurate Information
Of course, communicating between locations won't do you much good if your inventory management information is inaccurate. This can happen when you miscount inventory, your lead times are off, or you are sloppy with your bookkeeping. Maximize your profits and your customer service by keeping your information accurate and up-to-date.
5. Problem: Lack of Logistics Information
Even worse than having inaccurate information, however, is not having information at all. Some foolish companies either do not bother to keep track of their data, or they keep logs but do not refer to them. Keeping data from previous periods is essential for making inventory management decisions going forward. Not only should you record your sales, your shipping times and your profits, but you should analyze your data and look for areas of needed improvement as well.