Properly managing your inventory is a critical part of business process management. Wrong inventory management investment ends up costing businesses dear. By examining the common inventory management system mistakes, you can avoid costly missteps in the process.
1. Inaccurate assessment/Not assessing requirements
Some businesses find it challenging to assess their needs before investing in an inventory management system. They have no idea whether the new software is a perfect fit for their business unless they are mid-way down the implementation process.
Needs Assessment helps you justify a technology investment and makes it easier to quantify its benefits. An honest appraisal of your needs will save you headaches later.
This will ensure that you pick the right inventory solution for your business with the right features, such as the ability to use serial numbers for tracking inventory, create packing slips, and manage your supplies, among others.
Describe your business requirements and details to vendors. Tell them about your company background, goals and objectives, transactional volumes, timeframes for project completion, and deadlines for vendor responses. Do not forget to mention the features you can’t live without.
The availability of new technologies is driving rapid changes in different industries. It would be wrong to ignore the current trends in the industry, such as increasing customer expectations and rising competitive pressure if you want to maximize your returns on investment.
Following the latest trends will ensure that you bring the best automation management technology to your warehouse, which will help increase competitiveness in this challenging market.
2. Not focusing on compatibility with the current system
Some inventory management solutions take up a lot of virtual resources while requiring powerful computers and costly hardware upgrades to successfully run on.
When it comes to investing in inventory management systems, some companies are tempted into choosing an inexpensive solution, which may not prove worth the purchase. Businesses that view technology investment as a burden often end up dissatisfied with the software.
Sometimes purchasing low-end software may even put your business at risk, since most inexpensive solutions do not integrate with the existing software.
When you are making a purchase decision, make sure you understand the true benefits you would derive from the inventory software. Look for a solution that is truly compatible with your ordering system and accounting software and integrates with the existing technology. For example, you have been using Excel or Access to track inventory thus far. So you might want to know whether the data can be imported into the new inventory software and whether the latter can integrate with your accounting software.
3. Purchasing one size fits all software
One of the biggest inventory management system mistakes made by businesses is to purchase a “one-size fits all” type of solution. Not all businesses have similar requirements. If you purchase a solution primarily because it is the first choice of businesses, it does not mean it would be the best choice for you as well.
By purchasing a one-size-fits-all kind of software, you will continue to experience the frustration of stockouts on highly popular and demand items, thus affecting your financial success.
Look for inventory management software that meets 95% of your business needs and offers the right solution for stock control and warehouse management. You might want to invest in software that is made just for you and tells exactly how many losses you are suffering through stockouts or how much excess you actually have.
Moreover, the software should be scalable and easy to customize, which means that you can modify its functionalities as and when required.
One of the biggest inventory management system mistakes made by businesses is to purchase a “one-size fits all” type of solution.
Align the features and applications you need most to the quality of the hardware. Data collection is critical to inventory management, and you’ll save time and resources by purchasing a reliable scanning device.
4. Complicated to use
Some businesses purchase an inventory management solution without considering the amount of time and money required to train their staff. Undoubtedly, training staff can be a time-consuming and expensive process. A number of businesses find themselves struggling to manage time and cost, causing delays in project submissions.
However, when it comes to choosing a software solution, it is best to look for vendors that offer software trials or live demonstrations, offering you the opportunity to test drive the inventory software. Truly, evaluating how easy or difficult a product will be for your staff to learn is the best way to avoid common inventory management system buying mistakes.
In order to maximize your ROI from your new inventory system, make sure your staff receives the right training in order to make the most of the software.
5. Opting for periodic updating
Continuing with old trends and not keeping pace with current industry trends is one of the biggest inventory management system mistakes made by businesses. Some companies opt for periodic inventory management systems that do not show an accurate picture of your stocks and take into account the stock at a given moment.
On the other hand, perpetual updating offers minute-to-minute updates on the availability of stock with a company. Having an accurate inventory record ensures that you can immediately place an order for out-of-stock items, reducing order issues and raising customer satisfaction.
This also gives you an accurate assessment of your raw materials, telling you when to order more. Without an accurate inventory, you cannot consistently meet customer demand.
At ITQlick, we pride ourselves on being one of the leading software experts in the industry. We have done research on the leading inventory management systems and can help you find the right one for your organization that best fits your company requirements and is integrated with your present technological systems.