Managing inventory is important for all aspects of a business. Not having enough inventory means you run the risk of losing sales during a stock out. On the other hand, having too much can also be costly in many ways. Without an inventory management system, you risk these costs and other areas of inefficiency. There are many consequences to not having an effective system in place.
Here are our top ten consequences of not having an inventory management solution:
1) Increased Costs
You’ll spend unnecessary amounts of money on items that will not profit your business.
2) Impossible to Track Inventory
Without access to real-time info you won’t know how or where products move. This results in a greater risk of theft and obsolete inventory. Also, it makes inventory tracking much more complicated.
3) Lack of Inventory Balance
A lack of balance causes stock shortages and overstocking. Both scenarios can result in lost profits and costs you can avoid.
Are you spending valuable time and human capital on tasks you don’t need to? For example, manually entering data instead of scanning a barcode. With a system, you can put this time into other activities.
5) Conflicting Vendor Customer Relations
Customers want to put little effort in making sure you’re filling their orders correctly. The more effort they need to put in, the more unsatisfied they become. Not being able to ship or deliver on time results in a decrease in customer loyalty.
6) Decreased Employee Productivity
Are your workers doing tasks that could be quickly done by a system? If so, they are not as productive as they could be. An inventory management system would help to free up labor for other activities.
7) Ineffective Decision Making
Without the resources to analyze inventory trends, you will not be confident in your decision making. Having access to reports and metrics can make decisions easier and more clear.
8) Decreased Warehouse Organization
When you lack the fluidity of a system, your storage space becomes cluttered and difficult to effectively work within.
9) Increased Lead Times and Stock-Outs
Difficulty in tracking results in shipping and delivery delays. These delays are caused by poor replenishment or items being unavailable when they’re needed.
10) Delays in Shipping and Delivery
Difficulty in tracking inventory results in running out of stock when it is needed, causing you to increase lead time times and ultimately disappointing the customer.
Interested to learn more? Check out Clear Spider’s Inventory Management and Control solution.