One of the most frustrating things for business owners is having a customer ready to buy, but not having any of the product in stock. Your warehouse and inventory management policies should be designed to minimize this, but no system is perfect. You should continually analyze and benchmark your inventory policies to see if any new or existing problems are putting a strain on your supply chain.
Here are some of the top reasons why companies run out of important products and how to avoid these major supply chain hang-ups.
Poor Inventory Accuracy
Obviously business owners must have accurate inventory records in order to properly list or delist products on sales outlets. But accomplishing this is harder than just knowing it. Perhaps the biggest factor in knowing your inventory is your inventory management system. Outdated systems can put a huge damper on your efforts. Don’t miss out on all the perks of a contemporary inventory management system.
However, even the best technologies aren’t a silver bullet. You should do a comprehensive manual inventory count once a year at minimum to ensure your counts are truly accurate. And it’s even better if you do regular counts of smaller samples of your products to identify problems sooner.
Problematic Sales Forecasts
Knowing what you have is the first priority, but knowing what you will need is a close second. Forecasting your sales and adjusting your inventory isn’t something you should do by shooting from the hip and guessing. It’s a much better approach to use previous sales data, integrated with any sales or special promotions you plan to run.
As with inventory management, you can find business software that helps you forecast your inventory. Proper forecasting has a range of benefits, including needing lower safety stock levels, decreased out-of-stock times, and a lightened backload of unsold products you need to get rid of.
Not Enough Suppliers
Got that fancy new tech flying off the shelves? You better be sure you have plenty of potential suppliers to restock that product right away, or you will miss out on continuing the flurry of sales. Predicting sales can be tricky, but you can stay extra vigilant by finding more product suppliers than you may need early in the process in order to minimize out-of-stock products.
It never hurts to have more potential business partnerships in the pipeline, so do your due diligence and build your network even if it doesn’t seem like you have an immediate need. You also never know if your current suppliers are going to have something unexpected happen and you lose out on product at a crucial time.
Another advantage of this type of extra networking is you may discover suppliers with even better deals or products than your current partnerships offer. Never stay satisfied with the status quo and always keep your eyes open.
Poor Transportation Company Performance
If your product shipments are inaccurate or late, you could be wasting all your forecasting efforts. You want your shipment accuracy and delivery times to be as dependable as possible, so don’t settle for less-than-stellar partnerships.
There are plenty of excellent transportation companies out there with the expertise to deliver exceptional service. There are many well-established companies like C.R. England who have developed a serious reputation for reliability. You may also investigate smaller companies in your particular area with good reputations that can also get the job done.
You can take control of your supply chain and avoid these major factors that contribute to running out of stock. Every business wants to maximize product, so don’t lose out because of lax inventory processes!