Implementing proper inventory control systems and procedures can help ensure a business runs at optimal financial levels and that products meet customers’ needs and expectations. Over half of customers who have stopped doing business with a brand did so because customer service was poor. Of those customer service complaints, frustration over out-of-stock or back-ordered items is high on the list. In fact, research about convenience stores shows that out-of-stocks could cause a business to lose customers completely. Not many shoppers in any environment purchase an alternate item when their regular product is out of stock.
Other areas where companies see excessive expenses or lose traction include:
- Dead stock
- Excess storage costs
- Decreased sales
- Losing loyal customers
- Too much stock
- Losing tight track of inventory
- Lost goods in the warehouse
Owners of most businesses would be stunned to see how much help they can get and the money they can save by wisely managing their inventory. The best possible outcome is to balance customer demand with supply which is similar to talking a tight rope. Balance is everything.
Here are some tips that will get you thinking about getting and retaining control of your inventory process:
- Find A Good Inventory Control Plan with These Key Essentials:
A good inventory control plan addresses your orders from production or purchasing to selling the items and ultimately removing them from your books. An inventory control program should account for things like reducing wasted warehouse space, ordering supplies using a forecasting formula and setting up vendor relationships.
- Plan First, Then Execute:
Inventory management and control are continuous and do not live just at the warehouse level. Continuously monitoring metrics and updating your forecasts for future needs can allow for proper inventory management in the coming weeks or months. If we’ve learned anything recently, it’s that you may need to change your inventory management plan based on world events.
- Ensure You Always Have Critical Stock:
With good control, it’s easy to determine which stock is critical and ensure those items never go out of stock. This will stop that customer loss and frustration.
- Group Like Items:
As much as possible, group like inventory in the same areas. Unique or less frequently accessed products should have a single storage location.
- Find the Balance Between Inventory Costs and the Benefits of Having Stock on Hand:
Developing a truly effective inventory control system relies on finding the right balance between the cost of making and storing inventory and avoiding stockouts. There is real money tied up in that stock. Getting to know your business tools well will enable you to choose the right methods and forecasting techniques. You are looking to determine the total cost of your stock, including factors like warehousing costs and perishables, and weighing that against the demand and the cost of stockouts to give you the right balance
- Choose a Scalable System:
It is tempting for small businesses to order software systems that are one-size-fits-all or, conversely, free or low-cost. Cloud-based systems are infinitely scalable and can grow with a business and provide the analytics you need to continue your business’s growth.
- Have a Backup Plan:
No matter how high tech the software or well thought out the process, ensure that your business has a backup plan for power outages and theft. Cloud computing is always a better option than a local server.
NetSuite Can Provide Mastery of Your Inventory Control Process
Properly managing inventory and having insight into your stock at any given moment is critical to success. As an inventory control system, NetSuite offers a suite of native tools for tracking inventory in multiple locations, determining reorder points and managing safety stock and cycle counts right from your tablet or phone. Find the right balance between demand and supply across your entire organization with the demand planning and distribution requirements planning features and enjoy the safety of knowing your business is cloud-based.