Here are 10 reasons why you should definitely care about your inventory control:
1. You can’t survive without constant input and output
Every business depends on a constant inflow and outflow of supplies, products, and other resources. Inventory control is the process of keeping track of all those things. I’ll discuss in more specific terms how inventory control helps your business thrive below.
2. It affects every aspect of your business
Every part of your business relies on good inventory control to do its job. If there are no products, your salespeople can’t sell them. Customer service representatives will get flooded with calls if packages aren’t delivered on time. Your bottom line depends on how well you control your inventory.
3. Inventory is the second-largest expenditure of most companies
Your workforce is most likely the part of your business you spend the most money on month after month. But inventory is probably a close second. By limiting how much you spend on inventory to the bare minimum, you make sure you’re keeping more money in reserve for other worthy projects.
4. Inventory is a depreciating asset
Whether you’re dealing with food, electronics, motor vehicles, or virtually any other type of manufactured product, you have to expect them to go down in value over time. Food spoils, electronics become outdated, vehicles aren’t meant to sit idly for months, etc. You don’t want to have too much inventory on hand.
5. Carrying costs add up
You have to devote space to store excess inventory and you have to provide security to keep it safe. Those are just two of the things that contribute to carrying costs. By limiting the amount of inventory you have in your warehouse to just enough to cover your immediate needs, you keep carrying costs down.
6. Stockouts are lost opportunities
Having too much inventory is a major problem, and so is having too little. You don’t want to run out of products because that would send a signal to your customers that they can’t depend on you, and they may shop elsewhere.
7. Demand trends aren’t always easy to predict
Do you know how much of a given product you are going to sell this month or over the next year? No one can see into the future, but you can estimate sales with surprising accuracy using inventory control software. Using past sales data, you can find seasonal trends and other useful insights to guide your purchasing decisions.
8. Inventory control gets complex
Who said life is simple? As your business gets bigger, its inventory does, too, and the complexity of tracking it all increases. The earlier you make inventory control a top priority, the better. Master your inventory when your business is young and you will be more likely to keep up with it as it grows year after year. Also, start using inventory control software as soon as possible to make your task even simpler.
9. Without inventory control, it’s chaos
Order is not the norm. Things tend to fall apart if they’re left on their own. Don’t let that happen to your inventory system. Do your best to maintain inventory control by implementing software, training your employees on inventory processes, and using standard procedures when it comes to ordering, storing, picking, packing, and shipping products.
10. Your competitors are likely improving their inventory control
You don’t want to be left behind. Inventory control software is becoming much more commonplace among small and midsize businesses. Stay ahead of the game and gain a competitive advantage by having a better inventory control system in place than your competitors do.