Particular events that unfold within your warehouse may indicate your distribution company needs a firmer grip on its inventory management.

It’s worth nothing these issues can occur regardless of whether your company utilizes an ERP system. While spreadsheets and manual methods certainly lend themselves to greater potential for errors, automated solutions can come with a lack of real-time data validation and a variety of other technical shortcomings.

Before your company can regain control of its inventory, however, you’ll need to know which shortcomings are most reflective of a control loss. These six symptoms may denote larger inventory issues within your organization:

1. Your warehouse floor has too much or too little inventory
An overflowing warehouse is one of the more obvious signs a company is losing track of its inventory. Housing too much product will not only take away from the storage space on your warehouse floor, but it could also cause your company to lose money in the long run if goods go unsold.

Similarly, if you’re having to cancel orders because you don’t have items in stock, there’s a good chance your company is facing an inventory management problem. This particular issue is one that needs to be corrected promptly as it can lead to customer dissatisfaction and loss of business.

2. You’re experiencing longer lead times
The amount of time it takes your company to complete orders from start to finish may suffer if floor employees are spending too much time hunting down items to complete an order. This challenge may be a reflection of having too much inventory on hand; regardless of the cause, however, it’s imperative to get longer lead times under control.

3. Your company is often covering expediting fees
As overseers examine the effectiveness of their inventory management system, they may find many of these systems coincide. Covering expediting fees, for example, can be a result of longer internal lead times. While certainly not ideal, this costly alternative may be a necessary part of delivering past due orders to customers in a timely manner and, ultimately, ensuring they receive a positive experience overall.

4. Workers often engage in manual counts
Physical inventory counts not only open the door for more potential errors, they also take away manpower from your warehouse floor. It’s worth noting that while an automated system may not completely eliminate the need for manual counts, it can certainly help reduce them – thereby increasing accuracy and efficiency within your company.

5. Strained relationships with suppliers
Fewer things can be as damaging to a supplier relationship than a warehouse’s inability to effectively manage its inventory. Suppliers expect to be given a reasonable delivery deadline, and companies that continually request large or rush orders on short notice could be a drain on the supplier.

6. You’re not using an automated system – or worse, any system at all
Spreadsheets and other manual processes can lead to a number of inventory issues within your organization, ranging from inconsistent data, delayed entry and a lack of cohesiveness across the warehouse floor. Those problems are made exponentially worse without any system in place at all.

In the end, poor inventory control equates to customer dissatisfaction and a loss of revenue. If you find your company experiencing any of the six symptoms mentioned above, it might be time to consider an ERP implementation or upgrade. Ultimately, you’ll want to ensure your tracking system is scalable and able to grow with your business, allowing it to effectively manage your company’s inventory for years to come.

Companies interested in learning more about physical inventory counts can click to download the Physical Inventory Count Dynamics NAV Module Data Sheet.