Companies can increase their profitability
20-50% OR MORE
through careful inventory control.
Keeping track of what’s in your warehouse may be easier said than done, but it’s also critically important to your bottom line. The only way to know the true value of what you’ve got is to price your inventory accurately. As frontline leaders and manufacturing executives will attest, this entails paying special attention to every single warehouse item coming and going through your acquisition, sales, and use processes. It also requires diligently locating all items across your operations.
Whether you run just one or many warehouses, how well you know what your supply partners have in stock can make all the difference in your potential success as an industry leader. So much so that, experts at Business.org claim, “Companies can increase their profitability 20–50 percent or more through careful inventory control.”
63% OF THE TIME
How frequently inventory is accurate in retail businesses.
Not only has this always held true for manufacturing, but this reality has only been heightened n in the wake of the COVID-19 crisis, as explored in the Harvard Business Review’s recent piece, “Coronavirus Is a Wake-Up Call for Supply Chain Management.”
The article builds a case for organizations needing to know "exactly which suppliers, sites, parts, and products are at risk.” Only by gaining this insight will manufacturers be uniquely prepared to pivot in emergencies (like a pandemic and resulting global economic disruption), the author continues.
Why? Because those organizations have wisely equipped themselves to understand when and how to jump into action and “secure constrained inventory and capacity at alternate sites.”
Need further convincing? As reported by Manufacturing Tomorrow, inventory management “leads to savings of thousands of man-hours and results in increased efficiency and profits.
1/3 OF BUSINESSES
will miss a shipment deadline because they've
sold an item that wasn't actually in stock.
So, where to begin?
Unfortunately, there is no one-size-fits-all approach to streamlining your inventory management process. No “magic key” to turn and then all of your inventory management worries are over. The good news, at least, is that when you focus on the processes, systems, and behaviors that need to change, and when you’re willing to look at how your business can adopt the necessary tools you need, that’s when you’ll see major results in profitability.
To get started, our team at POWERS has compiled 4 key questions that you and your team should consider when it comes to inventory management, especially when it comes to the adoption of new technology or available inventory management software.
4 Big Questions To Ask When Improving Your Inventory Management Process
1. Do you need to look into technological advancements and additional tools to get us to where you need to be?
Let’s start with the basics.
As PC Magazine reports, “While ‘inventory management’ sounds like it's a simple tracking of what you have, inventory management software actually goes several levels deep. The software should integrate with at least one other back-end office system, namely, with either your accounting or enterprise resource planning (ERP) package.”
Yes, clearly inventory management is something that moves faster and smoother with a little automated help. But how do you know that you’re selecting the right software for your business? You actually won’t be able to answer that question until you answer several other questions.
2. Are you making sure that you’re already leveraging the technology that’s already available to you?
(This includes an exploration of not just what kind of technology to use, but how to use it.)
As framed by Industry Weekly, optimal software will be “designed specifically to help companies automate this process and improve their business efficiency. By automating this process, companies cut critical human errors, streamline logistics, establish reliability on available goods, improve customer service and strengthen brand reputation.”
3. Do you need to implement any training or other processes to ensure that the end-user has the knowledge they need to optimize the new tech’s features?
Sometimes, the software doesn't suit the complexities of the processes you have in place already. Or it may not align with the technology already in use by your team.
4. Where does adopting new inventory management software play into your big picture? Is that software oriented toward a solution?
Oh, and P.S. how’s your organization’s culture looking?
It’s amazing how often the long-term goals aren’t even considered before rushing into making a major purchase of the latest and greatest gadgets and gizmos. Have you actually taken steps to define your goals? If not, it’s time to rewind and start from there.
While it may, in fact, be time to get on board and start exploring your faster tech options to help you manage inventory, the solution may also reside within your company culture. To read about how to revive your company culture, check out our recent three-part series entitled, “How to Perform 'Cultural CPR' to Boost Company Morale and Results in 2021".
At POWERS, we customize our approach to each company we work with, aiming to help streamline every step of the process, which begins by defining objectives and looking holistically at what pieces of the puzzle are missing and where we can fill in knowledge gaps and amend behaviors. Our aim is to help businesses determine ways to maximize efficiency while also operationalizing their culture.