When it comes to orders, a well-managed inventory system can help your business grow. However, many companies go through the hassle of managing their inventory manually and waste time that could be spent on growing their business. Fortunately, with your local inventory management software company putting in the work for you, you’ll be able to stop inventory losses and staff efficiency will improve!
What Are Inventory Losses?
Most businesses experience inventory losses from time to time. This can be due to a variety of reasons, such as misplaced or damaged products, incorrect ordering, or theft. In any case, inventory losses can have a negative impact on your business’ performance. Here are the ways to combat inventory loss:
- Track Your Inventory Loss
Every business should track its inventory levels on a regular basis. This will help you identify patterns and determine where your products are going missing from the shelves. By tracking your losses in this way, you can identify potential problems early and take corrective action. - Use Technology To Help You Keep Track of Inventory
Many businesses now use technology to keep track of their inventory. This includes computerized tracking systems that allow you to scan barcodes or enter product data manually. By using such software for inventory management, you can ensure that you’re always aware of your product’s whereabouts and take appropriate action if it disappears from the shelves. - Compensate for Lost Inventory
If your product goes missing from the shelves, it’s important to take appropriate action to compensate for the lost revenue. This could include reducing prices, increasing shipments, or offering special discounts.
Causes of Inventory Losses
There are many reasons an organization’s inventory can go down, but the most common reason is a decrease in sales.
If you’re experiencing inventory losses, it’s important to determine the cause. Many times, losses can be prevented by understanding what’s driving them and implementing corrective measures.
Here are the common causes of inventory loss and how you can stop them from affecting your business:
Ineffective Purchasing Practices
If your company isn’t purchasing the right amount of product for its current needs, you’ll inevitably run out of stock. This can be exacerbated if your products don’t sell quickly, which means that your organization is buying more product than it needs and then having to dispose of it. To prevent this from happening, make sure to use accurate forecasting software to predict how much product your company will need in the future and purchase accordingly.
Poor Inventory Management
If your organization doesn’t have a system in place for tracking inventory and evaluating whether or not it’s selling at a profitable rate, you’ll eventually run out of product. This isn’t only inconvenient for customers; it also wastes time and money trying to restock when you could have been selling more merchandise.
Not Making Sales
When you have poor inventory management practices, you won’t be able to sell your merchandise as much. This means that you’ll end up with an over-stocked and excess product on hand that doesn’t sell to customers, which wastes your time and money while making your organization look bad in front of customers who could buy the product.
How to Stop the Inventory Losses?
There’s no doubt that inventory losses can have a major impact on your business. In fact, Statistics Canada reports that businesses with lower inventory levels are more likely to go out of business.
Here’s how to stop the losses from happening in the first place:
- Know Your Basis Point Inventory Levels
The first step is to know your basis point inventory levels. This will help you track your current level of inventory and identify any potential problems early on. If you don’t have a basis point system in place, use either standard units or weight units.
- Track Your Stock Levels Regularly
Track your stock levels regularly and use the information to make informed decisions about when and how to replace items. This will help you avoid buying too much or too little inventory, which can lead to decreases in profits.
- Limit Stock Replacement To Necessary Items
When it comes time to replace an item, only replace what’s necessary. This will minimize the amount of new stock that’s added to the inventory and help keep costs down. Additionally, it’ll keep customers happy since they won’t have to wait long for their orders to be filled.
- Use a Stock Control System
Stock control systems help remove inventory from the warehouse and keep track of it throughout its distribution cycle. This ensures that your company is always in the best position to meet its customers’ needs and minimize waste.5. Keep Inventory on Hand When items are needed quickly, keep them on hand just in case it takes a few days for delivery, damages/lost goods, or other unexpected issues to arise.
- Be Flexible With Your Pricing
If you choose to price your goods at a higher rate than competitors, you’ll need to be willing to adjust your pricing based on the latest changes so you’re able to stay competitive.
Conclusion
If you’re experiencing inventory losses that are causing your business to slow down, it’s time to take action. There are a few things you can do to help prevent this issue from happening in the first place, and once it has started, following these tips will help you get through it successfully. By taking these steps now, you’ll be able to minimize the damage that inventory loss can cause and keep your business on track for future growth.
