Avoid common mistakes when managing inventory

////Avoid common mistakes when managing inventory

Warehouse inventory management isn't always easy, but avoiding some simple mistakes can go a long way toward making sure an organization succeeds as they should. Industry professional Gary Smith wrote on CFO that especially when it comes to managing excess inventory, situations can get tricky and there can be consistent headaches that take away from what the company does. The No. 1 thing he said businesses should avoid doing is nothing at all.

"It's easy to put off decisions about what to do with your slow-moving inventory," Smith wrote. "But time, and the inevitable accumulation of inventory, will take its toll. And at year end, your company will be paying increased taxes."

Other common mistakes that should be avoided include:
– Lease additional space for storage
– Liquidate the items, which may lead to strained customer relations
– Keep selling the items in lieu of more profitable items
– Sell or give away the inventory to employees
– Send it to a landfill

One solution he said could be great is donating the excess inventory and getting a federal tax deduction. Regular C Corporations can do this and get a twice-cost federal tax deduction, which will reduce taxes and get non-selling products to non-profits who may be able to utilize it better than the business could.

"Gifts-in-kind organizations solicit donations of valuable, new merchandise from American corporations and redistribute that merchandise to their members, which include schools, churches, government agencies and other nonprofit organizations in need of supplies," Smith wrote. "The donation process is easy, secure and flexible, and many gifts-in-kind organizations provide a range of free services to donors."

Best practices to improve the supply chain from the start
Instead of waiting until something goes wrong with the inventory or there is an issue that needs to be addressed, manufacturers should attempt to get their best practices in order from the start. Supply Chain Quarterly contributor Bob Engel wrote one thing that can be done is to make technology work for the business from the start by selecting technology, such as a warehouse inventory management system, that will work for them and what they do.

Best-in-class organizations should have managers that understand what software or technology will help manage supply chains and produce beneficial information without any kind of workarounds or complications. Efficient software and mechanisms will give manufacturers the greatest benefit.

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