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3 bottom-line losses from incorrect inventory

3 bottom-line losses from incorrect inventory

Bad inventory is an affliction affecting many companies. Whether having items placed where they cannot be easily found or not having enough of a particular item for the needs of the customers, improper management is not good for businesses.

Here are some ways poorly managed inventory can hurt an organization:

1) Lack of visibility

A post on Manufacturing Business Technology said not having a view of inventory can make things complex. Simply adopting an inventory management system may be a great way to have a real time view of what is happening within a supply chain and workflow process. Otherwise, there is a lot of guess work, and likely monetary inefficiencies, that will find ways into the business.

"A single change can replicate itself company-wide instantaneously," the website said. "As a result, your staff can have greater confidence in the accuracy of the information in the system, and management can more easily track the flow of supplies and products – and generate reports."

2) No ability to truly plan

Software professional Elizabeth Bisson wrote on the ERP Software blog that without any sort of management system in place, a company is likely guessing what their future capacity requirements will be. This means there could be statistics or numbers that show a potentially profitable area that the organization is missing by improperly managing inventory.

3) Poor quality

Bisson said quality could also suffer as a side effect from poor inventory management, something that could hurt relationships with customers if left to fester for too long.

"Shipments can be delayed, fill rates can lag, packages can be broken," she wrote. "Inventory software identifies and tracks the various issues that could occur, and through reports and analytics, provides guidance regarding the factors impacting quality."

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Posted in: Inventory Management

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