Having an inventory is one heavy task. Taking care of all the products. Looking after the accounts.
Tracking accidental damages and whatnot!
Yes, all this hard work can get the best in sweat. But, thankfully, this problem doesn’t end on a bad note. By acknowledging some of the most common inventory management mistakes, we can learn and keep ourselves from repeating those.
So, are you ready?
Here are eight common inventory management mistakes that many managers make and you must avoid.
1. Failing to Predict Demand
It’s impossible to predict the future. We know. But is it really impossible to predict future demand based on the previous selling trends?
Think about it. Do you see a way that can help you craft a precise prediction about future product demands?
Pulling up the curtains, an inventory management software can do that for you.
This is one of the top features of modern inventory management tools. They can accurately forecast product demands based on previous selling trends. So, if you were having trouble doing that, these tools are here to help you out.
2. Not Tracking Performance Metrics
How can you be better than yesterday if you don’t know how good you were yesterday?
In simple words, if you don’t track the right performance metrics for your inventory, you’ll not be able to identify issues with your current management process, and hence you’ll not be able to fix them.
Sounds daunting, right?
Well, unawareness can be your worst enemy. So, make sure you are safe from this problem.
At least track the most important metrics like fill-rate, inventory turns, and the number of sales every day.
3. Not Using Software
It’s the 21st century. The world has moved way beyond simple technologies, and AI is slowly taking over a lot of them.
Do you still think that a pen and paper or maybe a Microsoft Excel kind of approach is your best bet for your inventory management chores?
Well, if you do, think again, because that isn’t the case at all.
Inventory management tools in 2019 are advanced and can take care of most of your inventory management tasks on their own. From managing data to forecasting product demand, they do it all.
This is one reason why not using such software will mean that you are lagging and who wants that?
So, get up now and upgrade.
Also, if you are a small business and can’t afford to shell the money for a regular inventory management tool, you can try using small business inventory software.
They solve the same purpose just keeping your small business’ size and money in mind.
4. Counting Inventory The Wrong Way
If you’ve been halting warehouse operations for days to take time out for counting items manually to ensure that this count matches the data in your software, sorry to say, you’ve been doing it all wrong.
Inventory counting should be an ongoing process. You don’t need to halt operations for this. That’d be extraordinarily costly and unnecessarily tiring.
Instead, divide your inventory into sections and count one section every day.
It’ll save time and money.
5. Not Managing Reorders By Yourself
A number of vendors in your industry may offer to manage inventory and reorders for you. And to start with, this may seem like a good idea.
Not having to hire and manage more people. Not having to worry about reorders management and not having to worry about anything else that may overwhelm you with stress.
The sad truth, letting your vendors do inventory and reorders for you isn’t all about peanut butter vibes.
Many times, the vendors may reorder amounts larger than your needs which can cost you money for something you don’t even need.
Sounds like a loss, right?
Well, keep yourself safe. By managing your reorders and inventory, you’ll be holding the control of your business in your hands.
6. Not Prioritizing Products That Sell The Most
While your inventory may have a world of useful products that your users may like, not all of them would sell the same.
We all know how some products sell more than others, right?
Well, if you are trying to nail the art of inventory management and want to be sure that you do it right, you must start prioritizing these best selling products.
So, understand everything about these products. Track their life cycles from the time when they reach your inventory to when the first buyer buys them, to when you sell out an entire batch of these.
This will help you find out about your next reorders.
7. Not Having a Defined Restock Process
“Restocking is all about letting things happen.
It’s fine to go with the flow.
Restocking is easy. What’s in it to worry so much about?”
Well, we don’t say you think that way, but if anyone does, it’ll be better to change that.
Basically, having a casual attitude towards the restock process can pull your business down.
The reason is that if you don’t use a defined restocking process, you will have a tough time finding loopholes and fixing errors. Clearly, following a new restock procedure every time means you run different checks for an error, every time you restock.
And honestly, even the sound of that is exasperating. So, what to do? Simply, keep yourself safe from such fiascos and follow a particular restock process; every time.
8. Not Paying Attention To Supplier Performance
As an inventory manager/owner, you would know how some suppliers are more responsible and reliable than others.
While a reliable supplier will keep your inventory needs satisfied, someone who’s unreliable may get you in trouble when you run out of stock.
So, ask yourself.
Is your current supplier reliable? Do you have any complaints with their service? Can you deal with this supplier for the rest of your inventory business days?
If the answers go as yes, no, yes, you don’t have to worry too much (still track performance), however, if any of the answers go the other way, you may want to rethink your supplier’s contract (if there’s any).
Inventory management is one of those tasks that can often get extremely frustrating. But as it’s crucial, managers do need a way to handle it better.
Aiding to the same, here we wrote about eight common inventory management mistakes that you must avoid.
Hopefully, this was helpful.