Don't Minimize Your Greatest Asset - Your Inventory
Proper inventory management is something that, for whatever reason, small businesses tend to overlook. Having the tools and supplies you need when you need them is absolutely imperative to being successful; yet it is overly common that small businesses don’t take seriously the significance – until it’s too late.
Inventory optimization, or managing your inventory needs and supply chain to its best potential can easily save your company money, increase sales and sales opportunities, and help your team work better and faster.
This is more than just keeping track; it’s a matter of having a well-defined strategy for inventory management in place and keeping to it.
Your main goal for inventory management is simple. You want your business to never run into an out of stock situation for basic materials and supplies. Out of stock scenarios, for all industries, are the peak of inventory inefficiency.
Not only does it usually leave a project (and, by extension, a customer or client) unfinished, you’re also looking at expenses related to getting that supply: the cost of express or expedited delivery, or travel expenses associated with acquiring the supply on shorter notice, plus the cost of an employee working on something they weren’t able to finish.
What we hear from business owners often is that they don’t like ordering certain supplies until they know that they need them. This is a fine strategy for specific products because over-ordering and having overstock is as inefficient as being understocked, especially if you’re working with products that expire or depreciate in value over time.
It’s important for you to develop a strategy that works for your team and your business, so that you don’t end up with costly production delays and cancellations due to supply issues.
It also doesn’t hurt to understand that there will sometimes be disruptions in your supply chain - the vendor you work with might run out of a product and leave you in the lurch unexpectedly.
Create a system for getting supplies from alternative sources, and make sure you have enough on-hand at all times to quickly bridge a potential gap. There are many strategies and even some services you can use in order to create an inventory optimization plan that can work for your specific business and industry.
But, knowing you need to optimize your inventory is the first step.
You cannot exist in a constant state of ordering things when you need them, and also can’t exist with a warehouse full of unneeded items. Pay attention to your inventory system and make sure your business is operating as efficiently as possible.