If you own a small business that is starting to experience rapid growth, then it’s time to take another look at your company’s inventory practices. You may have been able to keep tabs in your head when you were smaller, but now that your business is growing, you may find that much harder to do. Here are some things to know about managing inventory as your business grows.
Be Aware of Common Inventory Problems
Many inventory problems are common across numerous industries unless the owner or manager takes an aggressive approach to inventory management. Fill rates should be updated in a system that is available to many members on your team daily. While it may not be necessary to update inventory turns daily, you need to update these totals frequently so that you know how much product you need to have on hand to meet customer demands. Things like lead time are a huge part of making sure you keep stock on hand, but if no one is paying attention, you are going to run into issues. Many companies appear to have no one in charge of their inventory data.
Another common issue is that companies do not do accurate forecasting, so they do not have a realistic grasp of what inventory levels need to be to meet demand in the months ahead. If you are using a manual system, statistics show that the operator will make one error per 300 characters entered. On the other hand, inventory management software errors are much lower, and they often have easy to use forecasting tools, which can remove a lot of the headache for you.
Accuracy Is Key
Record keeping in many small businesses can be sketchy at best. Do not let this problem befall your company. Start by counting the inventory in one sector each day. Then, enter those numbers accurately into an automated inventory software system. You must start with reliable numbers to have an accurate handle on your inventory. Software can help with the accuracy of records, but if you don’t have good physical records, then there isn’t much they can do. Inaccurate records can cost your business a lot of money.
Make Someone Accountable
You must name a trusted employee to oversee your inventory. Then, give them the tools that they need to keep accurate records for others to base choices on regularly. Many software providers offer free or low-cost training allowing this individual to become an expert in inventory control.
If your company is going to be successful in its growth, then you must rethink how you are going to handle inventory. Start by making sure that your current numbers are accurate without totally shutting down operations. Then, share the data in an automated system. Put a trusted employee over your inventory and equip them with the best software and training.
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