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March 28, 2022

5 Signs You're Mismanaging Your Inventory

 

Inventory is vital to every warehouse, and managing your products effectively is key to smooth warehouse operations. However, if you've noticed dips in productivity or more stock losses than usual, you may be mismanaging your inventory without even knowing it! Inventory mismanagement can creep into your practices, and unless you know how to spot it, you can run into inefficiencies in your warehouse that will cost you time and money.

In this blog, we'll uncover some key errors you could be making in your inventory management process and best practices to optimize your operations. If any of these five signs are happening in your warehouse, you may be mismanaging your inventory.

Your Stock Is In The Wrong Place

It may be a rule of thumb, but one common issue in inventory mismanagement is not knowing where the inventory is kept in your warehouse. Your picking paths should be clearly defined to your workers—and they should be able to pick the same goods from the same place, every time. If your workers spend valuable time searching your warehouse for what they need, you'll quickly fall behind schedule.

Grouping commonly ordered items together and keeping buyer trends in mind are other stocking strategies that can help you get your inventory on track.

You're Overselling

Overselling is easier than it sounds, especially if you sell products through multiple channels. Accepting orders you can't fill is a recipe for disaster—and one that many warehouses accidentally take on. Overselling inventory can lead to backorders and upset customers.

Automated reports can alert you when you're running low on certain items. Additionally, be sure to keep consumer trends in mind and rely on previously gathered data to properly ensure you have enough inventory in stock for the upcoming season. Look at peak season or holiday data trends to keep yourself prepared!

You're Missing Stock Altogether

One step lower than overselling stock is selling stock that simply isn't there. It may sound like a good business decision on paper to offer more to your customers, but if your warehouse can't support more offerings, it's time to take a look at your books.

Set aside some time to focus on the strengths of your operation. Be sure to let the previous year's data and new forecasting guide your decisions about what is and isn't possible for your warehouse to provide. By staying data-focused, you can make better-informed business decisions.

You're Losing Time on Data Entry

Manual inventory data entry can suck up a large amount of time, especially if it's being completed in a difficult-to-use format like an Excel sheet. A lack of automation in your warehouse can lead to a significant amount of time wasted on inputting orders.

A warehouse management system (WMS) can help you organize your inventory by area, size, and weight of each product. A WMS works with you to optimize your warehouse layout and eliminates the need for bulky technology, such as printers or scanners, which could get in the way of efficient picking paths.

You Have High Fees on Stock That Doesn't Sell

Having a steady stream of stock is ideal, but inevitably, some items won't fly off the shelves. This issue is common, and a little long-term stock isn't something to worry about—but if most of your shelves are filled with slow-moving stock that lack of cash flow will add up. Allocating extra space for items that aren't selling can lead to hefty overhead storage fees that you might not be able to afford.

Take a walk around your warehouse and see if you can find any large areas of stock that aren't selling. If you find the majority of your stock is sitting on the shelf and gathering dust, this is a sign you're keeping items that your customers don't want, and it's time for a change.

The Ultimate Inventory Managers

Optimizing your inventory is easier than you think. With the right 3PL partner, you can gain easy-to-use technology and the experience you need to set your inventory management straight. With almost 50 years of experience, Materialogic can work with you to analyze and implement efficient inventory management practices. We customize a plan specifically for your warehouse and ensure that you reach your inventory goals.

Talk to one of our specialists today to discover how your inventory can be better managed.

Materialogic Guide

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