Four Disastrous Inventory Control Mistakes in Small Business

Achieving optimal inventory levels is a critical goal for any small  business, yet it is one that is often managed in the wrong way. This is because there is more to it than simply deciding how much stock to order. The smart director will have to be on top of a number of crucial factors so that they can spend money more efficiently while still catering to their customers.

Four Disastrous Inventory Control Mistakes in Small Business

Along the way, people inevitably make mistakes though. Here are four of the most common that you’ll find when it comes to stock control.

1) Implementing Restrictive Performance Measures

Although inventory management is complex, it is not uncommon for businesses to focus on limited targets that completely ignore other factors. For example, a company may concern itself with hitting their forecast within the specified timeframe without even considering consumer demand, levels of customer service, inventory turnover, etc. A better stock control model will take in all of these aspects, adjusting the forecast to suit the real world data. Simply focusing on meeting your forecast is meaningless by itself and will put your business in an unfortunate position when it comes to catering to consumer demands and optimising your sales performance.

2) Forgetting About Efficient Storage Policies

When a business starts up, stock is generally placed haphazardly around the warehouse wherever there is space. While this may work in the initial phases, once the business grows it can result in your staff having to spend needless time traipsing back and forth seeking a particular item. Instead, take the time to organise your layout in the following ways:

• Keep similar items in the same areas within the warehouse

• Place your best sellers near the loading dock for easy shipping

• Form clear, uncluttered paths so your workers can get around

Making the most of your warehouse will save your employees valuable time when picking up and loading stock that needs to be sent out. The less time they have to spend searching, the more productive their working day will be.

3) Only Using the Basic Features of Technology

While most companies will have some sort of stock control software in place, very few actually use these programs to their fullest. This is a pity, as the best will have a number of helpful features that can be used to optimise productivity in the workplace. In fact, the top inventory management systems give you full control from order to shipping. If you simply install these programs and try to learn them on your own, you’ll miss out on a myriad of helpful features that could benefit your business. To avoid this, opt for a software company that also provides onsite training for your workers. Make sure they cover topics such as:

• Optimising the inventory within your warehouses

• Creating accurate, real time stock level reports

• Streamlining inventory layout and picking methods

• Boosting your company’s customer service levels

All of these are important elements of the stock management process. By educating yourself and your staff, you can then handle each of these tasks with ease thanks to the user-friendly comprehensive software you have just installed.

4) Lack of Overall Management and Accountability

If the forecast your company makes fails, is anyone responsible? If the answer is no, your business may have a problem. After all, accurate forecast management is a fulltime job, requiring someone to handle it exclusively. Failure to nominate someone will result in forecasts that don’t reflect the company’s needs or public demand. Also, the act of hiring a stock manager allows you to conduct regular inventory checks so you keep on top of the entire process. Instead of counting your warehouse goods once a year (which takes needless amounts of time), your manager can tally up a different section every day, giving you accurate information that can be used to adjust your forecasts and your stock selling tactics.

As you can see, these four mistakes will have drastic effects on your company, detracting from your ability to optimise your inventory and meet consumer demand. Now that you’re aware of them though, you can take steps to avoid these pitfalls and give your business a better chance of survival through some superior stock control techniques, policies and strategies.

About Sonia Allen

Sonia Allen is a hardworking professional who still finds the time to write between projects and deadlines. She doesn't focus on just one topic but likes to explore different subjects, including home improvement, entrepreneurship, real estate, investments, and more.