What can be measured can be managed”
- Mitch Wronsky, CFO, Jonar (and many other smart business people like Peter Drucker)
Regardless of whether you manufacture your products or purchase them from a distributor, or both, inventory management helps you control and track the goods your business handles from purchasing all the way to sale ensuring you always have enough of the right items in the right locations at the right time.
As your business grows, staying in control of your inventory and properly managing it only becomes more difficult. Trying to manually keep track of all the pieces that are moving in and out and all about, won’t work long term. With new orders coming in, shipments going out, returns, multiple warehouses with several locations, hundreds of clients, and many employees, you can’t have your eyes on each stage without a solid process in place.
Without inventory management, you put your business at risk of profit loss, employee dissatisfaction, customer dissatisfaction, and the risk of outright failure. These risks are a result of inaccurate data and inefficient processes. The great news is that this is a problem that can be solved. Determining your inventory types, techniques, and reviewing your current processes is a great place to start.
First, it’s important to identify what inventory model best suits your business depending on what types of goods you sell.
Inventory control techniques help you manage your stock in a way that is optimized for your business model.
Inventory management is an essential aspect to running a successful business. Poorly managed inventory really means you don’t have a clear idea of what is actually going on in your warehouse or storage facility.
Let’s be clear here though, efficient management of inventory isn’t a cut and dry process, and solutions to overcoming the obstacles aren't always obvious. Different business models and levels of complexity require a vast array of well-thought out solutions. How do you know what you’re doing right and what you’re doing wrong? Is there a more efficient way to do things than the way you currently are? Let’s discuss some of the common pitfalls when it comes to managing stock levels and how things can quickly get out of hand.
An obvious, yet challenging obstacle to overcome is ordering the right amount of stock at the right time. It may seem like a blackbox with ever-changing factors at play. Though not impossible to achieve, it is a balancing act that requires constant upkeep. Inaccurate reordering levels can result in holding too much inventory, which increases storage costs, and places unnecessary pressure on your cash flow. Also, depending on what kind of products you sell, idle inventory could mean you may need to dispose of said unsold inventory. Being understocked also prevents you from accepting orders, which means you’re losing out on sales and perhaps making customers unhappy along the way.
Needless to say, knowing how much and when to reorder stock is crucial if you want to keep costs down and maximize sales.
Even if you’re able to successfully identify reorder points and track inventory coming in and out, inventory control within your warehouse is often overlooked. Not knowing how much inventory you have and where it is can cause friction points when trying to get orders out the door. This leads to unsatisfied customers, and if you sell online, there’s the dreaded one star review.
When your storage facility is in disarray, warehouse workers can’t pick products efficiently, which disrupts the fulfillment process by causing delays to getting products out the door. This can also lead to picking errors where the wrong items are being added to an order and skipping proper quality checks. These issues are only compounded if you have multiple warehouses.
Having a system in place to keep track of the history, movements and processes your inventory goes through is essential to avoiding these devastating pitfalls. Visibility into what is actually going on with your business will alleviate manual work, reduce errors and provide valuable insights to keep improving your business.
We created ParagonSMB to help businesses forget about the chaos of dealing with everyday tasks, like inventory management, and focus on growing. We aimed to make complicated processes easier by offering a system that takes the work out of inventory, e-commerce solutions, multiple warehouses, reporting, order management, and more.
Having a system like ParagonSMB will help you always know where your inventory is located and how much stock you have on hand. It handles your orders, fulfillments and shipments with its connections to Amazon and Shopify e-commerce platforms. The system provides you with a built-in reporting tool that allows you to create template reports. You can also connect to your QuickBooks online accounting and import/export all of your data automatically.
Built to have you up and running in no time, ParagonSMB communicates with the platforms you are already using. Transactions and references are pushed between all of our integrations so that you don’t have to do the same work across multiple systems. It will save you time and money by removing tedious inefficiencies and by providing your customers and employees with the best experience possible.