The bigger your company gets, the more logistical challenges you’ll face. To help, I’ve compiled a list of five major problems involving inventory management, and I also offer solutions to each of them. Let’s dive in and start problem solving!
Solution: Use a Reorder Point Calculator
Running out of products leads to numerous problems, not the least of which are disappointed customers and lost sales. A reorder point calculator can solve this problem by helping you plan how many products to order, how much time it will take to get them in your warehouse, and much more. Just plug in a little information and start coming up with a plan of action.
Problem: Product Overstock
Solution: Use Inventory Control Software
Having too many products is a serious problem because it means you’re spending too much money and having to devote valuable warehouse space to storing those extra products. If you use inventory control software, you can find trends in products sales at each of your retail locations and/or warehouses. Armed with this information, you’ll be more likely to avoid stocking up on slow-moving products.
Problem: Product Spoilage/Obsolescence
Solution: Measure Your Inventory Turnover Ratio
Another problem with product overstock is that it can easily lead to a lot of spoiled or obsolete products. That’s what happens when products sit on shelves for a long period of time rather than quickly being sold. To combat this, you should measure your inventory turnover ratio. This is calculated by dividing the total cost of goods sold in a year by the average total cost of inventory in stock in the same time frame. The higher the number, the better.
Problem: Lost Orders
Solution: Use Inventory Tracking Software
How long does it take you to find out when an order gets lost or a supply chain gets disrupted? Just a few hours could make a big difference. Inventory tracking software allows you to monitor orders’ progress each step of the way to and from your warehouses in real time. This is extremely valuable because you can use it to quickly resolve conflicts that would lead to serious disasters down the road if left unchecked.
Problem: Data Discrepancies
Solution: Use Inventory Management Software That Integrates with QuickBooks
A serious problem that many companies face when dealing with multiple software solutions is trying to keep all the numbers straight between them. If you sell a product, and you have to update your accounting records and then your inventory records separately, you run the risk of entering the wrong information in at least one of them. It’s much better to have inventory management software that integrates with your accounting software and other solutions. That way, when you make a change in one solution, it tells the others to make identical updates.
Fishbowl Inventory integrates seamlessly with QuickBooks, and it solves all of the other problems listed above. Sign up for a demo of Fishbowl Inventory today to see it in action.