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Inventory Management – Tool for Efficient Output & Cost Control

When it comes to the list of most important parts of a business, inventory unarguably makes it to the top 3. One might see inventory as just a storage department of goods and products but in reality, inventory is a lot more complicated system. It plays a crucial role in keeping the sales of an organization on the brim and makes the uninterrupted supply of raw materials and products to the manufacturing facility and distributors.

Many organizations make an unjustified mistake when it comes to efficient inventory management. If you are facing problems in your supply chain, it might indicate towards the inefficient management of inventory. Below is the list of five most common mistakes one makes when it comes to inventory and a detailed guide on how to avoid them.

  • Lack of Performance Indicators

 

Performance is one factor that affects the entire working of an organization. Lack of performance is a growing issue in the present era organizations. The major reason behind this is lack of performance indicators. How is one expected to have a clear insight into the performance of employees for analysis and improvements when the standards are not even in place?

A proper metric system must be installed in the facility to keep a track of fill rate and inventory turns. Moreover, inventory managers must be able to have a handy control on these and should be able to exert a decent control.

 

  • Unskilled labour indulged in inventory management

 

Unskilled labour is another reason behind poor inventory. We live in a fast-moving world and hence, it is difficult to stop the operations once unskilled labour is integrated with the system of the organization. Below is a list of steps that must be taken to make the inventory management and related processes smooth.

  • Hire qualified people: Start hiring people who you think deserve and are qualified for the job. You have invested a lot of money in the inventory and your organization’s run depends on the inventory. Hence, hire more skilled and efficient labor for inventory management.

 

  • Assign responsibilities: Start assigning responsibilities to individuals and inventory managers for the smooth functioning of the inventory. Also defining responsibilities will make the structure stable and free from inconsistencies.

 

  • Train: Training plays a major role in keeping the labor force abridged about the latest trends and effective methods. Hence, train your workforce involved in the inventory right from the start.

 

  • Lack of plans due to inefficient forecasting

 

One should be able to foresee the future and upcoming trends and should be able to predict the effective methodologies to contain the drizzles that might affect the working of the inventory. It gets very frustrating for the employees to get together and brainstorm a plan right when the situation demands it. Hence, forecasting and creating a full proof plan is definitely going to assist the organization in efficiently managing the inventory.

  • Automation is not something you are aware of

 

Automation is the emerging trend of 21st century. If you are still stuck with tracking the inventory by means of paper log or excel sheets, you are way behind in the current technological world. There are various software that has made inventory management a lot easy for the modern corporate world and must be integrated in your organization too.

 

  • Zero attempts for inventory count

 

Spending precious time on manually checking and counting inventory will only result in wastage of time, money and other resources. Checking the inventory as per the section and having a barcode scan to verify them is the most efficient and effective way.

Sales numbers are not the only factors that influence the capital flow in the organization. Inventory is also something that incurs heavy capital flow for the efficient working of the production facility as well as for supplies. It is really amazing how much a company can save while sticking to efficient inventory management. Team Faber has helped various organizations in overcoming this problem and has helped clients in saving huge amounts of capital and resources that were consumed in the inventory management programs.

In today’s competitive world organizations strive for business excellence and team Faber Infinite has been helping organizations to craft growth opportunities through different tools and techniques.

For more info, contact us @consulting@faberinfinite.com.

Written & Compiled By Faber Kishlay & Faber Mayuri

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