Consequences Of Poor Inventory Management

Storage is an essential operation for the company since it consists of intelligently placing stocks of goods, finished or unfinished products, and raw materials in the storage space.

Inventory management ensures that the goods available are kept in good condition, optimizing storage space, but also knowing the number of goods available at all times. But how is inventory management fundamental to the business?

What is the use of inventory management?

Inventory management is an essential task for the company since it mainly consists of organizing the storage of goods, checking the level of stocks, but also planning the frequencies of replenishment. It brings together all the procedures put in place to define the replenishment date and the quantities to be procured.

It is therefore essential both financially and economically, moreover having good stock management in a company has multiple objectives:

  • Reduce the costs associated with the storage of goods
  • Guarantee an amount of stock adapted to customer demand
  • Limit losses linked to expiration, deterioration, or theft of products
  • Save cash by optimizing storage and replenishment

The risks associated with mismanagement

Management issues are crucial for the proper functioning of the company and the sustainability of turnover, especially if you want to offer quality products and services to your customers.

One of the first risks relating to poor stock management is undoubtedly under-stocking or too little stock. In this case, you will be confronted with problems such as out of stock which will lead to the loss of the order and consequently of the customer in question since he will go to pick up the goods he will need from another supplier.

Unlike under-storage, you may also encounter a problem of over-storage which will require you to pay heavy charges (fixed and variable) for storage and handling or even result in capital immobilization.

How to optimize your stock management then?

For improving your stock management and especially, to avoid errors during any inventories, it is best to take the help of inventory management services intended to ensure the organization of stocks, the inventory, and the ordering of replenishments in complete autonomy.

It is also possible to implement an effective replenishment strategy to optimize inventory management. Do not hesitate to call on an in-house expert of CAC to help you choose the right replenishment method for your business since it is possible to place an order according to the replenishment date, fixed or variable, and the desired quantity ( fixed or variable).

Effective inventory management will also include special storage mechanisms, designed to minimize the movement of goods during the production process as well as the time required to perform inventory control.

Another helpful tool in inventory management is barcode numbering, barcodes can increase accountability, as well as the accuracy of inventory counts, as they will increase the visibility of what inventory is on hand and what is not in real-time.

With the help of the barcode numbering services of CAC, businesses can also reduce the risk of under-inventory or over-inventory errors. Maintaining optimal levels for each commodity can also prevent spoilage or dead stock and reduce costs associated with purchasing and maintaining stock.

So, what are you waiting for? Quickly contact the experts of CAC and make your business processes easier and faster.

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