5 Signs Your Small Business’s Inventory Control Isn’t Working by Marcus Lansky
When your small business starts growing rapidly, deciding how much to order, where to store it, and how much safety stock to keep on hand can feel like a guessing game. Get it right, and you could please customers and hit records profits. Get it wrong, however, and you could encounter inventory problems that cripple your company’s cash flow and its reputation. Inventory management is high-stakes for small businesses, yet a lot of them get it wrong. Fewer than one in five small businesses use specialized inventory software to manage their stock, while the rest rely on pen and paper, spreadsheets, or don’t track inventory at all, according to Supply Chain Dive. This can lead to inventory problems that bog down warehousing and fulfillment and erode customer satisfaction.
5 Common Small Business Inventory Problems
These inventory missteps manifest in obvious ways throughout a company’s operations, making it clear that there’s a problem — even if business owners don’t always recognize the source.
1. Slow order fulfillment Slow picking and shipment can do serious harm to a small business’s reputation. Consumers prefer fast delivery and expect to know when their items will arrive. When businesses promise fast shipments and don’t deliver, it sends shoppers looking to competitors.
2. Frequent returns Customers like shopping with businesses with a simple return policy, but if you’re getting more returns than you can keep up with, it could be a sign of problems in your warehouse.
3. Obsolete stock and shrinkage Stock is money. So, it hurts when it expires or disappears from your inventory. While some amount of shrinkage is inevitable, businesses shouldn’t find themselves constantly marking down old products or losing track of inventory.
4. Not enough stock On the other hand, some businesses struggle to keep enough items on the shelf — or struggle to find what’s there. The result, unfortunately, is customer-facing problems such as bare shelves, backorders, and oversold items.
5. Spending too much time on inventory management Some businesses manage inventory well but spend too much time doing it. Not only does this pull staff from other duties, but manual processes also introduce a high level of human error.
3 Reasons Your Business Can’t Keep Up with Inventory
These are the symptoms, but what is the source of inventory problems? If your business has chronic inventory issues, one or several of these management problems is the likely culprit.
1. Your staff is stretched too thin If your main complaint about inventory management is that everything moves too slowly, look to your staffing for the source. While some problems can be solved with better training, sometimes it’s as simple as hiring more employees to keep up with growing demand. You may need more warehouse employees, or you may need someone to optimize your inventory tracking system. If you need admin or tech support, look to the remote workforce for your hiring needs. You’ll save money on office space and get access to a wide range of freelancers.
2. You’re tracking inventory the old-school way There may be another way to solve staffing problems: by switching from labor-intensive manual processes to an automated inventory system. Small businesses can adopt automated inventory management with surprisingly little equipment. Inventory management software, barcodes, and barcode scanners are enough to upgrade from spreadsheets to a more foolproof (and faster!) system. In addition to helping keep accurate numbers, inventory management software can send reorder notifications and improve forecasting.
3. Your warehouse is disorganized Are misplaced items, mis-picked orders, and slow fulfillment causing a bottleneck in your business? A disorganized warehouse creates a cascade of problems throughout the fulfillment process. Warehouse problems can be solved by adding warehouse space, improving the layout, and optimizing inventory location and picking. Some small companies decide that outsourcing warehousing and fulfillment is the best solution for their business.
Inventory management can make or break a small business. So, when it comes time to invest in your small business’s inventory control, don’t cut corners. With modern tools, efficient procedures, and the right staff to grow your thriving business, you can make the most of booming demand and make your customers — and your bottom line — happy.
Source: "5 Signs Your Small Business Inventory Control Isn't Working" by Marcus Lanskyand was submitted by the author for the readers of our website.
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