Over 1100 small businesses participated in the 2017 State of Small Business Report. Of those, 43 percent either used manual processes to track inventory or didn’t manage inventory at all. If you are a company that has hesitated to add an inventory management system to your operations, the following thoughts might pop up, not only in your own mind, but in your business meetings, too:
“Our old way works just fine. Why should we change?”
“Change is hard and potentially time consuming.”
“It is too much money.”
It’s OK to consider these factors in your decision making. However, don’t make them a barrier to improving your overall business, either. So, I’d like to address each of the aforementioned “myths” you might believe about the implementation of an automated inventory management system.
“Our old way works just fine.” But does it, really? That had been the feeling at RaceSource, a custom manufacturer of vehicle components for the racing industry. But RaceSource Vice President Paul Huffaker found that as their business expanded, so did the growing pains— especially when it came to inventory management.
“Maintaining an accurate inventory count on Excel was time consuming and error ridden,” said Huffaker. “Often I would reorder or manufacture parts I already had simply because I didn’t know I had them, which was an unnecessary cost. And with many smaller items being combined into an assembly, I needed a system that could use the existing UPC codes to track the individual item as well as the assembly.”
How many nights have you stayed way too late at the office, sifting through files and piles of spreadsheet? And even if you eventually organize the data you need, you can’t be sure it’s completely accurate. Even the best typist makes a keying error every 300 strokes. And that can add up. You can never be certain about how many keying or handwriting errors are unaccounted for in your data. Plus, the reports you pull up are likely not up to date, either. Let alone that fact that you might be wasting money by ordering extras of things you don’t necessarily need – all because your inventory control is out of control.
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“Change is hard and potentially time consuming.” While I can’t deny change is not always easy, that doesn’t have to be the case with inventory management. In fact, in some cases you can download a free trial of a program and try it out before introducing it out to your employees. This was a selling point to Huffaker as he considered doing away with spreadsheets.
“The free trial that lets you test drive the system and see how it works specifically for your company,” Huffaker added. “This provided me with the opportunity to learn the system before I made the purchase and see what I liked about it.”
Once your business is ready to take the first step, the standard installation and implementation can be performed while you’re still doing business. And this is accomplished with little or no downtime. Plus, on-site training can be provided, with web-based technical support available after the initial installation.
“It is too much money.” Yes, it will take money. But, what is your inefficient warehouse operation costing you right now? The wasted time searching for items, which aren’t located in the right places, doesn’t help. As mentioned before, you likely spend countless hours sifting through papers for reports and audits or going over figures multiple times, to make sure they’re correct. Customer satisfaction dwindles when items aren’t in stock or shipped late. And when customer service suffers, so do sales.
An automated inventory management system is an invaluable investment into your growth strategy. The upfront cost will pale in comparison to the money you’ll save in time and manpower alone in a short amount of time. Barcode labels and scanners will give you the data you need, on the front end (sales and support) and back end (warehouse and shipping) of your business – with a simple scan. In fact, an omnidirectional 2D barcode scanner allows you to scan from any angle, enabling your employees to read up to four barcodes and know the serial number, part number, lot, and date among other things.
As a small business, you desire growth in revenue and profits. As you add employees, their happiness is important to your company expansion, as well. And when these facets of your business aren’t effectively working together, then you set yourself up to fail. RaceSource made the decision to change inventory control tactics and saw favorable results the first day. Further, in one year they saved $8000 and 52 hours of labor. For a small business like yours, a change to your inventory management is something you must seriously think about if you want do better business and boost your bottom line in the coming year.
In what ways could an inventory management change your business for the better?