Inventory Issues Resulting from Outdated Supply Chain Software

In today’s competitive business environment companies realize they have to improve their inventory control, increase productivity in the warehouse and lower their operating costs.

Yet, many are reluctant to replace their outdated computer system with current Supply Chain Software not wanting to incur additional cost. What they fail to acknowledge is that using their outdated software results in excess inventory in the warehouse and higher operating costs affecting their bottom-line profit.

Outdated Supply Chain Software Issues:

  • Misplaced Inventory in the warehouse is not found until a physical count is taken at the end of the year.
  • The misplaced items often become excess inventory and sometimes are outdated and cannot be sold.
  • While the misplaced inventory is collecting dust on the shelves, new inventory is purchased.
  • Not having accurate information, the purchasing department often buys additional inventory that might become excess inventory once the missing products are found.
  • Incorrect shipments and late deliveries often result in customers refusing to accept them and ‘charge back’ to the distributor.
  • Not having accurate landed-cost information can result in financial losses.

Modern Supply Chain Software Benefits:

  • Inventory received in the warehouse is scanned and the computer data is instantly updated in ‘real-time’ mode becoming available to the end user.
  • Weekly cycle count results in finding misplaced inventory eliminating the need to close the warehouse at the end of the year to take a physical count.
  • Accurate shipping eliminates returns and charge-back.
  • Labor costs in the warehouse are drastically reduced by using RF Guns directing the pickers to the designated location and insuring the right items are picked.
  • The use of smart phones enables salespeople and customers to view the computer information.
  • The truck driver who delivers the inventory gets the customer signature and updates items the customer refuses to accept. The host computer is immediately updated.

Purchasing Department Benefits:

  • Having real time information of customers’ orders, inventory on hand and the products’ lead time shipment, enables the purchasing agents to make better decisions about what to buy and from whom to buy it.
  • Ability to view the inventory level in different warehouses:  if one warehouse has excess inventory while the other is short of inventory, rather then buying new products the over-stocked warehouse inventory can be transferred to the other warehouse.
  • The computer calculates the inventory level of seasonal items and customer history buying trends.  Based on the time of the season it is, the purchasing agents can judge what products should be bought.

The Benefits of Having Integrated E-Commerce

Having informative E-Commerce enables the customers and the company sales reps to view what inventory is available at what price and past buying trends.

  • Orders placed on the website eliminate phone calls and faxes that are time consuming, enabling the company personnel to address customer issues.
  • Orders can be placed any time during the day or night.

Published in Progressive Distributor Magazine

About SMC & Dani Kaplan:

Since 1980, Dani Kaplan has worked with manufacturers, distributors food distributors and food processors as the trusted advisor helping them lower their operating costs, streamline their operations and control the inventory.

Dani can be reached via SMC