In the article “Argument Against Rigorous Inventory Control,” author Luke Arthur gives several reasons why businesses shouldn’t focus so much attention on tracking inventory. He makes some interesting points, so I think it’s only fair that I address them and give you the other side of the story. I’ll go through each of his arguments on cost, time and training, and hopefully resolve his concerns with sound logic.
Arthur notes that inventory tools can wind up costing thousands of dollars. Yes, an inventory control system, with its barcode scanners, printers and other equipment, doesn’t usually come cheap. But that doesn’t mean it’s not a worthwhile investment.
Many companies report saving so much time and money by using an inventory system that it pays for itself just a few months after they start using it. They save money by cutting the size of their inventory, reducing the number of products that spoil before they can be sold, making employees more productive, and many other ways.
Arthur argues that employees’ time is better spent making sales, not worrying about inventory in a warehouse. The trouble with this point is that even if a company sells more, if it lacks the inventory to fill all the new orders it won’t be any better off. This also assumes that every employee, even salespeople, have to work in a warehouse and/or manage inventory. That’s not necessarily true. An employee can specialize in one area of a business and let others focus on other areas.
An inventory control system helps employees make better use of their time when they are working on inventory. Employees can get more done with barcodes scanners and inventory software than they could by writing numbers down on paper and entering them into Excel inventory templates. When an inventory specialist takes a few days off, it’s nice to have a backup or two to take his place.
It’s true that an inventory control system requires most, if not all, employees’ participation, but that doesn’t mean every employee has to be trained on all aspects of the software. Cashiers can be taught one thing, shelf stockers another, etc. Also, to make the training process cheaper, you can simply have one or two employees get the full training and then train coworkers on specific parts of the software.
Another benefit of using a rigorous inventory control system is it usually includes clear-cut training materials. In some companies, the inventory system is cobbled together in Excel or some other program. But what if the programmer who designed it leaves without writing an instruction manual? The whole company could face delays as someone else steps in and tries to learn the system or design a new one. This is much worse than taking a few employees at a time to receive quick training.
Basic Inventory Management
Arthur’s alternative to rigorous inventory control is for employees to simply write down what products are sold so they can be added to a computer system later. This idea brings up a slew of difficult questions:
- Who will enter the data and how will they be trained?
- What if the data is written improperly or typed into a computer incorrectly?
- Will employees require training to know what information they need to record?
- Which computer program should be used to record inventory levels?
- How will the inventory system integrate with the accounting system?
- How will employees know when to reorder products?
All of these questions can be quickly answered by using a rigorous inventory control system. But they’re much harder to answer with one that is done by hand.
Find the Balance
An ad-hoc inventory control system might work for startups and very small businesses. But as soon as you grow into multiple locations or start serving a large number of customers, you’ll discover it can’t handle all your needs.
Of course, you shouldn’t go overboard and get an expensive inventory control system you can’t afford or one with all sorts of features you don’t even need. Be wise. Go with Fishbowl because it is an affordable inventory solution that can add new features in the future as the need arises. That’s my advice to you.