4 Things People Get Wrong with Inventory

Do you have a warehouse that is filled with a variety of items that you need to track? If so, you know that it can be difficult to keep track of everything, especially if you have multiple items available. You may also need to track items that are selling or need to be kept track of while they are being resold, shipped, or stored

When it comes to managing inventory, many people have a lot of misconceptions about the best way to do it. Not everyone takes the time to put things in perspective, but it’s easy to do so when you look at the numbers.

An inventory is a list of the things that exist in a particular place that contains the name, quantity, and details of each item. Some businesses may also utilize inventory forecasting software so that their work becomes more efficient and has fewer errors. To keep track of all the things that exist, it is important to maintain a complete and accurate inventory. We need to keep accurate records to show how much of each item we have. But some people do not know how to keep an inventory, what to include, organize, and calculate.

Here are the four things people get wrong with inventory:

Overselling

Inventory is a critical part of the supply chain and can be a problem spot for a company. Efficient, accurate, and timely data is essential for all activities associated with the movement of goods along the supply chain. Reliable and consistent information on your inventory along the supply chain is at the foundation of your company’s ability to sell goods and services. Our inventory system will provide you with the information you need to ensure that your supply chain runs smoothly.

Unsuccessful vendor relationships

Every company has a story about the time an unreliable vendor has burned them. For example, they’ve signed up for a huge contract with a new vendor, only to have the vendor deliver substandard materials or even nothing at all. How many of these stories have you heard? The truth is those unreliable vendors are all around us, but they’re not always visible to the naked eye. They’re not always obvious to the company that may have lost out on a contract because of their poor quality and/or service.

Not forecasting

One of the pitfalls that often ensnare new leaders is reliance on forecasting. This practice typically involves using historical data to predict future events, a strategy that, while common, can lead to oversight of critical, potentially altering information. Thus, forecasting can sometimes be a deceptive guide to decision-making. The concept of “not forecasting,” or the assumption that what you predict will certainly be available, has been recognized for its flaws. For instance, in the context of a food retail business, this might mean presuming an item will be in stock without concrete confirmation. Relying solely on this method without considering KPI indicators or current market trends can result in poor inventory management. For businesses in this sector, recognizing the need to order from wholesalers, such as food and drink wholesalers, Wanis, can be crucial. Accurate forecasting, informed by a variety of KPI indicators, allows for more precise orders, reducing waste and ensuring that demand is met.

Absence of automation

IT organizations are increasingly using automation to improve their operations, but despite the benefits, people still prefer to manually pick up and put away inventory. Automation, the process by which a computer analyzes data to make decisions, is one of the most effective tools that companies can use to get things done more efficiently. Automation is also one of the most powerful ways to increase productivity and profits since it frees up employees to spend their time more effectively, like by taking on new projects. Using an automated warehouse management system (WMS) can ease the management of operations, as companies will be able monitor and track their inventory in a computerized manner.

The first and most important thing to know about inventory control is that it is not a case of the “what you see is what you get” mantra. You never see what you have in stock, only what you have sold or what you have credited to your credit or debit card transactions. You see what everyone sees, but what you see is always obscured. While the subject of inventory control has been also over-discussed, it’s still a difficult topic for a lot of people.

Warehouses that are well organized provide a safe and efficient working environment for employees. It is important to set up the flow according to the order of operations. For starters, organize your inventory by classifying your items to ensure you’re organizing the slowest-moving items appropriately. Organizing your warehouse in a logical manner by labeling inventory areas (using Warehouse Magnetic Labels or other tools) and work zones can make sure that their flow is maintained in the long run. Once your warehouse is organized, it is essential to regularly review your processes and procedures.

That being said, the supply chain has changed a lot in the last decades. Gone are the days of just ordering a truck up, and a few days later, it’s there. Today, the industry is all about supply chain management and ordered forecasted demand. This is where modern fleet management systems and their applications come into play.