Inventory Control Challenges (“The Cost of Doing Business”)
An unautomated warehouse causes problems, but there are solutions…
by Dani Kaplan
- If inventory arriving at your warehouse is manually entered into the computer, it will result in a lag time before your sales department knows it’s in stock. There’s also a good chance goods will be misplaced due to keying errors.
- When consolidating items on shelves, inventory often gets misplaced because the computer wasn’t updated. This results in unnecessary replenishments.
- At physical inventory time when misplaced inventory is found, this “lost” inventory often becomes excess inventory that might never be sold.
- When incorrect products or quantities are shipped, it creates a “domino effect” of business disruptions.
- Returned products carry double freight bills and the invoices will not be paid until credits and adjustments are issued.
- If the shipped inventory is replenished, often it might become excess inventory.
- At physical inventory time when the lost inventory is found, this “lost” inventory often becomes excess inventory that may never be sold.
Buying Based on “Guesswork”
- Not having accurate computer information will result in purchasing the wrong products or quantities.
- The unsold inventory will collect dust on the shelves in the warehouse.
- Just because a product was initially a fast moving item does not necessarily mean it will be a big seller once it reaches maturity.
Dani Kaplan, president of SMC Data System Inc., smcdata.com can be reached at (917) 647-2466. He works with corporate executives to improve purchasing, increase warehouse and distribution efficiencies and implement solutions that result in substantial savings and productivity improvements.