If you run a business of any sort, you are probably well aware of how important a stocked inventory is to the proper functioning of your daily routines. In spite of that, inventory management is something that most businesses do not pay much attention to instead of focusing their best minds and manpower towards optimising the production lines.
That is a huge mistake and can in fact cost your business pretty heavily in the long run. How? Well that’s what we are going to discuss in today’s piece. Here are some of the pitfalls that most small and startup businesses succumb to when it comes to managing their inventory!
1. No Proper Planning
Planning out your inventory and storage space is just as important as planning out every detail in your production line. But when starting off, many businesses fail to pay attention to this crucial bit of information and just keep improvising, as their inventory grows over time.
This, in most cases, leads to workers spending hours inside the storage facilities without being able to properly find and categorise the items that are needed. Not only is this a massive waste of time, it also leads to wasted manpower. This can easily be avoided by installing something as simple as an inventory management system.
2. Overstocking or Running out of Stocks
Following in the footsteps of an unplanned inventory we have the age-old problems of running out of important production material or overstocking them to such a degree that an unnecessary amount of capital is stuck in them.
Depending on the production system that you have implemented in your business, you can end up saving a lot of money by ordering raw materials exactly when you need them. Implementing the right production planning software will save time and optimize processes, which, in turn, allows managers to focus on growing their business.
3. Improper Execution of Production Procedures
Depending on your business model, you might have chosen to implement a just in time production model or maybe a perpetual delivery model… regardless of which one you choose for your business, the important thing is controlling your production numbers so that you never run out of storage or raw materials.
However, without a proper inventory management system in place, you can rack up thousands of dollars in extra warehousing space just because your inventory wasn’t properly organised and you had no clear idea about your storage capacities. All of this can again be avoided pretty easily with an inventory management software that not only allows you to update your inventory in real-time but also adapts your incoming and outgoing orders to optimise maximum usage out of available storage.
4. Employing the Wrong Method For Inventory Arrangement
For small businesses and startups it is often enough to categorise inventory by hand and employ the ABC method of categorising and storing. However, often there is a more optimised method available that can significantly reduce the time your workers would spend looking for products in storage. So, what arrangement method is best suited for your needs?
Well, there are multiple algorithms that can figure out just that. And if you run a very big warehouse or an e-commerce platform, then investing in automation might also be a good idea depending on the scale you currently are at.
Cleaning up and arranging your inventory might seem like a chore at first since it has no obvious short term benefits, but in the longer run, it is one of the most determining factors when it comes to maintaining efficiency and production rates.
That’s not even taking into account the fact that when you have a clean and easily accessible inventory, your workers can go and do their jobs much quicker, which means that you have also created a happier working space. In the words of Marie Condo, organising consultant extraordinaire — “The objective of cleaning is not just to clean, but to feel happiness living within that environment.”
And at the end of the day, that’s what we are all striving towards no matter how small or big our businesses might be!
Article by Vishal
Meet Vishal Gaikar, the tech wizard hailing from Pune, India, who's on a mission to decode the digital universe one blog post at a time. When he's not tinkering with gadgets or diving deep into the digital realm, you can find him concocting the perfect cup of chai or plotting his next adventure. Follow his tech escapades on Twitter and buckle up for a wild ride through the world of innovation and geekery!
