We can define inventory outsourcing such as counting outsourcing and periodic verification of material stocks (movable and immovable property) that a company has, in order to verify the degree of effectiveness in material handling systems, method of storage, use of space in the warehouse and control of goods. In this post, we explain the advantages of the commitment to outsourcing inventories.
However, when this mechanism is not correctly implemented or optimized, this can represent productivity problems for your organization and cost increases. These can be the result of keeping the stock in stock, for extra orders or for the shortage of some product.
In contrast, going with inventory management companies who are responsible for resolving these deficiencies can help you increase your company’s profits since they know the challenges in product supply, accessibility, and storage. For these reasons, here we present the main advantages of using an external service to control your inventories.
Physical inventory outsourcing services may include the following benefits:
- Pre-planning for taking inventory data. Goals.
- Physical inventory count process.
- Labelling of goods through unique codes.
- Physical inventory check vs. registrations made
- Inventory valuation.
- Determination of inventory differences: excesses and faults.
- Presentation of the final report on the inventory.
- Recommendations and internal control suggestions.
The reasons or advantages of inventory outsourcing, and why the company decides to outsource this service are:
- It allows the company to focus its greatest energies on what it really knows how to do and knows, avoiding the involvement of the company’s own staff.
- Inventory service planned to suit the client.
- Impartiality in the results obtained, obtaining accurate and reliable information.
- The real record of the inventory of the movable and immovable property of the company
- Confidentiality of data and results.
- Reduction of operating costs and better service quality.
When an external company is hired, it is specialized in the service it offers, therefore, it generates greater quality in the service provided.
Also, one of the most notorious attributes of outsourcing is the transfer of risks, which in logistics can be applied not only to the area of inventories but to any point of the operation, from the supply chain to the attention to the final customer.
At this point, an external service must guarantee the supply and timely disposal of materials and merchandise, to avoid cost increases, delays in deliveries and losses.
Thus, and according to the inventory management companies in India, the main risks to take into account when hiring outsourcing for inventory control are:
- Problems in optimal inventory levels. An external solution should always avoid excess or lack of stock at a given time.
- Inventory cost overruns. The third-party should never incur undue inventory maintenance practices, which raise their rates.
- Errors in stock determination. The calculations of the variables to determine product availability must be transparent and accurate.
Alteration of accounts in balance. The supplier must avoid errors in the composition of the inventory at all costs.