If your business deals with inventory in some form, you may have encountered conversations that sound like this:
“We forgot to order more of [important product] and now we’re all out.”
“Hey, [Potential Customer] asked if we have [product] on hand, but I told them I didn’t know…”
“No one knew for sure if the [material] was expired, we didn’t think it was, so we used it.”
“There’s some guys in suits at the front desk asking for you, what’s an audit?
Every business has mistakes, setbacks, and failures that serve as “learning opportunities”, but how can your business cut back on costly mistakes when it comes to inventory and its management?
Let’s take an unconventional approach to how you manage your inventory base business, and imagine the least effective, most costly methods, and work backward from there.
Don’t Count Anything, Ever
No one actually likes counting inventory. No one likes tracking what’s coming in, going out, or being assembled. All of that time counting could be spent on actual work. Although, we do like to count the dollar signs from the latest sales order, as long as we don’t misplace them…
OR you could… Count Everything
Count what you have on hand. Count how many products can be produced from your current stock. Count when items are scrapped, sold, or repurposed. Every number can have value and provide insight if you know how to use it.
- Get Software: An Inventory Management Solution is your “counting machine” that knows what is coming in, being made, being ordered, etc. Trying to manage inventory and processes with only a spreadsheet will eventually limit your efficiency and time.
- Get Mobile: Incorporate a Mobile Warehouse Tool to scan, move, and pick your items. Less time spent in data entry is a good thing.
- Get a Workflow: Count the time involved in repeatable processes and then standardize in the manner that will save your business time and hassle. Then you’ll be able to count the labor and costs saved.
Always Add Steps
The more complicated your inventory management system, the more high-end it must be, right? Akin to having a work meeting about an upcoming work meeting, the more steps involved in creating a finished service or product must indicate how great the work is. Make sure to overcomplicate very simple tasks, and require multiple sign-offs for even the most straightforward of projects. The more people you involve, the more resources you can pour in for no good reason,and the more time you can consume, the more valuable that “effort” becomes.
OR you could… Streamline Your Workflows
We’ve already touched on the need for workflows, but a process should exist to simplify the work itself and hopefully remove potential confusion. If your company’s processes create the opposite of this, it’s time to re-evaluate their value.
- Time It: If you’re a manufacturer, an ERP system provides the means to track time and labor per project for job costing. With this information, you can see where production hits bottlenecks.
- Plot It: Break down best, worst, and average process scenarios for business. The insight may reveal unrealized improvements, unneeded steps, or even unknown limitations of current workflows.
- Upgrade it: Imagine you do find a bottleneck in your workflow, how do you fix it? It often comes in the form of an upgrade. Upgrading tools. Upgraded workstations. Upgraded inventory training for employees.
Keep Everything in One Location
Why bother with multiple storage locations when you can just pile everything up in one giant mess? Paper files? Toss ‘em all in that big set of drawers. What about all of that critical business data kept in a single location, don’t worry about backing it up to a separate server, it’s just another thing to do.
OR you could… Organize and Backup the Important Stuff
Organizing your storage locations sounds like a no-brainer, but it’s far too often overlooked. Creating and maintaining organized inventory storage reduces time and waste. Creating and maintaining proper business data–and backing it up–reduces time, waste, and even the possibility of losing data due to file corruption.
- Label Everything: Label Aisles, Rows, Shelfs, Bins, even equipment if it will help. The initial investment will save time and get new employees up to speed faster. 2D Barcodes and a corresponding scanner will make it even faster.
- Systematize Everything: Create an expectation of how the job is done, how to name files or projects, where equipment or particular documents go, etc. Good work will flow and mistakes will be easier to recognize.
- Back-up Everything: While this typically applies to all things digital–always backup your data–this mindset also applies to necessary supplies and equipment. If a significant portion of your business relies on one machine, and it breaks, do you have a back-up, or at the very least, a back-up plan?
Only One Person Gets to be in Charge
Similar to Keeping Everything in One Location, the best way to run your inventory-based business is to put all the responsibility on one person. Make sure that only one person is in charge of ordering, receiving, and tracking inventory. Even better if you make sure this single individual is the only person who understands the inventory software, and has the only login credentials. Sure, they can never call in sick or go on vacation, but at least your labor cost will be low.
Or you could… Establish Employee-Based Redundancies
Putting all your inventory responsibility on one person will lead to inefficiency and mistakes, and is often referred to as a “single point of failure”; one mishap, one sick day, one job opportunity and your business is suddenly scrambling just to stay operational. Fortunately, this ticking bomb can be defused through basic planning or forethought.
- Train your people: Onboard all employees with big picture understanding and job specific details, and then retrain often.
- Schedule your people: Everyone deserves a break, so track what employee brings what skillset, and account for the business needs when planning schedules.
- Appreciate your people: So simple, but so often overlooked, your workers like to know they are valued, and that value comes in the form of recognition, respect, and pay.
Never Change, No Matter What
This is how your dad did it, and their dad before them, so why change now? Despite years of improvements, or proven new methods, your way works, or at least it works well enough. So what if you’re not the biggest or best, you’re still in business.
OR you could… Change for the Better
Forget the size or success of your business, the point is to make it better, and that change doesn’t need to be drastic to be effective.
- Take in the (market) view: a rising trend in your industry may not fit your model, but it can provide insight into what is changing and how. You should want to know that.
- Take baby steps: changing a process or incorporating a new technology can be a big deal, so take your time to understand it. Once you catch the vision, run with it.
- Take what works: There will always be a bandwagon to jump on, but if you find a new approach that can save time, provide new revenue, or just make life easier, use it. Grandpa isn’t rolling in his grave if you’re making the business better.
Businesses don’t intentionally waste time and inventory, but without the right tools, planning, and analysis, they are inadvertently doing just that. Losing time and wasting inventory happens, but it can happen a lot less by implementing even a handful of the ideas we’ve covered.
If you’re still not sure where to start, or want some help taking your inventory to the next level, get started today!