How Small Business Owners Can Steer Clear of Costly Inventory Control Mistakes
If your business sells goods, then good inventory control is crucial, errors will cost you money and in the long run, can cost you, customers.
Minimizing the potential for mistakes can ensure profitability over the long haul and should be part of any good business plan. Here are some key trouble spots and how you can avoid them.
Out of Stock = Out of Luck
Stock-outs are a classic example of poor inventory control. Yet even big retailers are known to make this costly mistake from time to time. Poor organization, human error, and a lack of communication between departments are often at the root of the issue.
Unfortunately, many retailers are still using outdated and ineffective processes. If you’re relying on pen and paper or spreadsheets then you most likely fall into this category. One way to avoid this pitfall is to invest in more modern inventory control technology.
Inventory Control Technology
A barcode inventory tracking system is an inexpensive solution for many small business owners. You will need to invest in labels, readers, and software, and for streamlining communication and processes, your business should move inventory, sales, and purchasing to the cloud.
While moving to the cloud might sound like a major undertaking, it’s a forward-focused endeavour. Entrepreneur points out that keeping data in the cloud has the bonus benefits of being more secure, flexible, and affordable than in-house systems. Ultimately, it’s an efficient and productive move that can pay off in spades.
You can even apply this type of tracking to your assets. By assigning unique IDs to your investments like office and warehouse equipment, so you can stay abreast of where they are at all times.
Too Much, Too Little, Too Late
In an effort to avoid stock-outs, many small businesses make the mistake of ordering surplus amounts. However, as AZCentral warns, holding excess inventory has its own drawbacks. It can lead to problems like expired or obsolete goods, not to mention taking up space hotter items might occupy.
Investopedia points out proper inventory forecasting is the key to avoiding too much stock. With accurate counts due to a barcode system, you will be able to use historical data to project turnover and minimize over-ordering. Again, an efficient inventory control process is at the heart of your success.
Garbage In, Garbage Out
Your employees are another critical component in a well-run inventory-based business. While there will always be some level of human error, remember your staff will require good information in order to produce good results.
This needs to come in the form of training.
Training does more than keep mistakes to a minimum. When your staff understands how and what they need to do, morale is improved. You reduce the amount of staff turnover as a result, and you even reduce safety concerns.
Of course, training must extend to all levels, from your warehouse to your checkout procedures, and not everyone learns in the same way.
Some employers incorporate several training methods to ensure all workers are on the same page and comfortable with the information they are processing. Some of your employees might benefit from role-playing, while others learn best from tutorials.
Many employers choose to bring in an outside expert to help with training, along with improving their inventory control process. There are many freelancers available for hire through online staffing agencies, including e-commerce, inventory management, and supply chain management specialists.
Also, take into account each role and what might be most applicable. For instance, a training video might be helpful to introduce a basic stock check-in procedure, while hands-on training with diagrams for reference could help staff remember how the stock is organized.
At the checkout counter and sales staff might need on-the-job experience to walk them through various inventory-related scenarios.
When inventory is your small business’s backbone, the right stock numbers can make a world of difference. What’s more, ensuring your staff knows what to do with that stock keeps things from running amok.
With accuracy, sound procedures, and effective training, you can ensure your company’s ongoing success in inventory control.