5 Tips to Managing your Inventory in a Tough EconomyJuly 7th, 2014
Managing Inventory costs and Human Resources when your business is shrinking, is essential to weathering the storm at a tough economy. Your growth plans and the economy may not always agree, but AdvancePro is here to help!
By keeping tabs on managing inventory and human resource costs, you will be better equipped to weather the storm.
Real-time business operations tracking helps you avoid these common industry pitfalls:
Never Oversell Your Products Again
Maintaining and building your positive reputation are critical, especially when times are tight. Every time you make a sale, you are putting your reputation behind that transaction. By selling products without a good inventory management system, you run the risk of promising products to customers when you cannot actually deliver. This results in customers waiting, possibly for weeks, for orders that they may have already paid for. If your customers become really impatient, they may choose to cancel their orders and go with one of your competitors instead. This whole ordeal may cause your customer to think twice before ordering from you again. They may also tell their friends or post online about their experience with your business.
Using an inventory management system will help you build your brand as one of reliability and will enable you to provide an excellent customer experience.
Free Up Cash
Every dollar is important during slow periods. While you never want to be caught overselling inventory to your customers, the opposite problem can be just as devastating to your business. When you purchase inventory from your suppliers, you do so in hopes that you will be able to sell that product to your customers within a reasonable time frame. If you can’t sell that inventory, the cash you paid may be tied up on your shelves collecting dust.
Inventory management systems can provide you with intelligent reporting to determine whether or not to place new orders. You can also use the intelligence available to determine what quantities to reorder. Once you have brought the inventory in, you can use intelligent reporting to determine whether to hang on to your products or clear them out at a discount to make room for higher profit items.
Stop Chasing Orders
When there’s no extra money lying around, you need to make sure that your teams’ time is used as efficiently as possible. On every sale that you process, there are many stakeholders that need to be aligned in order to get orders out the door to your customer without a hitch. Without an inventory management system, information needs to be relayed by manual methods from one stakeholder to the next. This can play out a bit like a game of broken telephone. As an example, let’s say you have a sales rep who is visiting a client. He may write down the client’s order while he is on site. He will then call head office and read off the order to an order entry person. That order will then need to be approved and a picking slip will be printed off for the warehouse staff. The picker will then go and pick the order, BUT WAIT, he realizes that part of the order is not in stock. The warehouse staff will then need to communicate this back to the office admin who will need to get in touch with the sales rep who will need to get in touch with the client and let them know that the item or items are out of stock. This is just a small example of the chaos that can take place in a company where there is no inventory management system in place.
An integrated operations management system would allow the sales rep to view inventory levels while he is at the client’s location. He would be able to place the order directly in the system and to alert the customer that the item is not currently available. Since sales rep is entering the order into the system himself, there is no chance for miscommunication with the order taker at the office. A pick slip is created automatically form the information that the sales rep has put into the system. The warehouse staff can then efficiently fill the order and ship it off to yet another satisfied customer.
Easily Keep Accurate Accounts and Inventory Levels
Keeping inventory levels up to date and reconciling accounting information can be an extremely time consuming task, especially when you need to focus your full attention on generating revenue.
An integrated operations management system enables you to keep your inventory up to date at all times by incrementing inventory and adjusting accounts as the transactions are happening in real time. Your accounting information is always current since it is tied in and synchronized with your operations management software. This allows you and your staff to focus on being revenue generators instead of administrators.
Make Well Informed Decisions
When business is slow, every decision can have a hugely significant impact on the success of your company. Making uninformed decisions based only on gut feeling, without information to back them up, could just be the hole that sinks the ship when it’s struggling to stay afloat.
An operations management system that provides you with reporting capabilities is a vital piece of the puzzle to help you make smart decisions based on real information.
Contact us TODAY to talk with a business operations expert and request your FREE trial of AdvancePro.