No matter how good your inventory management is, there are some risks that most businesses can not predict. Which are these inventory risks and how you can avoid them?
Which Are The Most Common Inventory Risks?
1.You Aren’t Fully Digitalized
Are you using spreadsheets to track your inventory? Even if you do, are you sure that you are doing it correctly? Spreadsheets need time, effort and if you do not have the required knowledge then it will be risky and mistakes will be very likely to happen. Using inventory management software means that you will be able to use the best practices to optimize your workflow. In addition, you will be able to monitor all the orders and shipments. Investing in a stock control software solution is a method that will help you improve your inventory management as well as leave the paperwork behind.
2. Have you thought about inventory theft?
Inventory theft is a common risk in all businesses due to management mistakes. How can you reduce the inventory loss? To avoid this error remember to track your products over time, keep tracking through documents and add multiple users to keep the process in check by more than one employee. What about the common loss? No one wants to lose inventory by mistake. Using inventory management software you will be able to keep an eye on and check all the products in your warehouses without losing any of them.
3.Your team isn’t qualified for managing inventory
You want your inventory to be organized and safe but how can you have it this way if your employees aren’t qualified? Before hiring your employees, you have to decide which qualifications you would like them to have and then start researching for the ones that seem to fill out most of your criteria. Let’s say that you hire the right people, which is the next step? Train them from the start! Emphasize the key practices and build a strong team that will be able to manage the inventory correctly. Furthermore, many software solutions such as Megaventory can provide training even to inexperienced users to learn about the best practices that they should follow for successful inventory management.
4.You have overstocking problems
Overstocking is an undesirable error that costs money. What happens to your inventory when it’s overstocked?
Your excess inventory becomes “dead” either due to expiring dates or because it is considered to be out of season, out of style even irrelevant. In other words, you will have to throw the inventory that it’s in excess which equals loss of money. In case that the overstocking products won’t be out of season then you will have to save them in your warehouses. This means that you will need to have extra storage as well as greater storage costs. In both cases, your business will be harmed.
5.You don’t want understocking either
Understocking is when you do not have enough quantity of some products in your warehouses. This means that your customers will not have their order on time. Understocking will affect your customer’s experience since the products will not arrive on time.
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How To Avoid These Inventory Risks?
There are plenty of solutions to avoid or manage to sort out these inventory risks. First of all, you will have to use the right inventory management software. Using inventory software equals success in the digitization of your company. Also, you will be able to track your purchase orders, your sales orders and have control of your stock while keeping an eye on your warehouses. This way your company won’t have any overstocking or understocking issues thus the customer’s experience won’t be affected.
Concerning inventory theft, by using inventory management software you will be able to add tracking by location and be able to see the exact place that your inventory is. Adding tracking by location instead of using only tracking by product types will save you from an important problem: inventory theft! In addition, a business can avoid inventory theft while using inventory software. Why? Because inventory software provides the option of choosing which of your employees will control the inventory stock. This means that inventory theft will not be a fault of an employee.
Of course, don’t forget that your employee’s qualifications depend on you too. You can set up a system including training, practices, and goals for each month. This way you will be able to see the process and the progress of your employees. In addition, you will be able to see the weaknesses of each employee and manage to work on specific tasks in order to improve the workflow.
How can a business avoid overstocking and understocking? Megaventory’s on-hand inventory management can help you avoid overstocking and understocking risks. Since it has a multifunctional module that is useful to perform many operations such as checking the physical quantity of a product, checking the non-shipped quantity in sales orders, etc.
Do you know how Megaventory can help?
Let’s see an example of how Megaventory structures information in every order. A sales order is a process usually initiated by a prospective buyer to inform you about the products and associated quantities they would like to buy from your company.
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Stamatia Manolara is a Digital Marketer and Content Creator for Megaventory. Her passion is staying up to date with the latest digital marketing technologies as well as upgrading her skills and developing new ones.