Most of the entrepreneurs do not care about the inventory of their business unless their inventory manager leaves. As a fact of matter, making good hires and applying other techniques such as putting blue dot next to your best selling items are the two main aspects of proper inventory management. However, there are many mistakes business owners commit while managing their inventory and following lines explain some of those.
- Holding Too Much Inventory:
Most of the owners maintain too much inventory fearing that they will be cut short of critical items when they are most required. However, this will not only consume a lot of working capital but will minimize the profits as well. Furthermore, there are increased chances of inventory getting damaged, depreciated and even obsolete. You might have to even sell old inventory at discounted rates. Therefore, it is always better to project how much inventory you need and when do you need it in order to maintain inventory in best possible manner and improve your profits.
- Inaccurate Inventory Tracking:
Once you have sorted out how many items you need, you should always have them on hand. Opportunities for miscounts are everywhere as far as inventory management is concerned such as during receiving and order fulfilling. In this regard, it is advisable to embrace latest techniques such as bar coding and electronic data sharing (EDS) to eliminate the chances of data entry errors.
- Lack of Priorities:
It takes a lot of effort and time to identify which items always have to be in inventory. The greatest aspect of proper inventory management is that you have to concentrate on items that matter the most. In fact, only 20% items are enough to meet 80% of your requirements. Therefore, you need to spend more time on these 20% items in terms of recording, reviewing in stock position and forecasting.
- No Backup Plan:
As most of the inventory is managed through computers nowadays, it is important to maintain a proper backup that will save your from a disaster in case the computer breaks down. The proper inventory management demands you to maintain a remote backup storage in case the main source is out of order. For More Information Regarding Warehousing and Distribution by Clicking Here.