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Keeping track of inventory and using the right tools to analyze its movement is a core function of many businesses. Improper inventory management can lead to major profit losses. There are a few common mistakes that companies make in their inventory management.
Inventory management software can be a great tool for analysis and record-keeping, but it should not be the sole source of information. Everyone in all departments of the company needs to be aware of current promotions and inventory discrepancies.
Having too much inventory can be an expensive mistake. Accurate forecasting methods can help determine how realistic your sales projections are. If inventory sits on the shelf for too long, it could lose value by becoming damaged or outdated before you sell it.
Using data from past performance to predict future performance is key to proper inventory management. Pay close attention to how quickly inventory is moving through the company, and use this information to regularly adjust inventory levels. Tracking fill rate and inventory turns can help you monitor inventory and stay on top of demand.
Use a tracking and management program that operates in real time. Automated systems allow for several users to access and edit information in different locations at the same time.
There are experts out there with the skills needed for proper inventory management. If your staff is inexperienced or not well-trained, your company could suffer as a result. Items could inexplicably get lost, costing the company money and time. Look for qualified managers to run your warehouse and make sure your training techniques are up to par with industry standards.
Make sure your systems are efficient and up to date to accurately forecast before making purchasing decisions. Your employees should be well-trained and qualified so they can communicate and make decisions appropriately. If the warehouse is running smoothly, the rest of the business should follow suit.
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