Importance of Inventory Management Part 2

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Importance of Inventory Management Part 2

5. More Productive Team With Inventory Management

The effects of ineffective inventory management are felt most by your employees and team members. Your team members are the ones who have to pick up after the inefficiencies of poor inventory management. They, then, are left dealing with mundane and repetitive tasks that eat into their team’s productivity and suck the life out of anyone unfortunate enough to be left handling them.

Activities such as writing stock reports, reading codes off of parts, calculating the number of available stocks, and filling spreadsheets are more than unproductive.

Apart from making your teams unproductive, manual tasks:

  • Lead to a demotivated and unengaged team
  • Cause burnout and employee stress
  • Lead to attrition and high employee turnover

An effective inventory management system helps you save the time your team would spend manually searching and sorting for parts. You can then redirect your team to spend the time saved on more productive and critical aspects of your business.

6. Better Customer Experiences

An effective inventory management system allows you to plan for delays and shortages in advance. It will notify you whenever you’re about to run short of a part or stock that’s essential and also remind you as you head towards a seasonal shortage of a given product. This buys you time to put contingencies in place that prevent your shortages from turning into delays that affect your customer service. Having a reliable operation that always delivers earns you the trust and respect of your customers. All these eventually add to a good customer experience that allows you to retain your existing customers and convince new ones.

7. Greater Visibility With Real-Time Insight

Having a manual and outdated inventory management system is the equivalent of driving in the dark without headlights. For one, you have limited knowledge of what’s going on in your operation. Often, you don’t have the data about the parts you have, those you don’t, and the ones you’re running out of within reach.

The effects of running such an operation include:

  • Unplanned shortages
  • Disorganized warehouse
  • Uninformed decision making

With an effective inventory management system, you always have 360-degree visibility over your operations. You also benefit from real-time insight, which allows you to get information about occurrences in your warehouses as they happen from wherever you are.

9. Brings Scalability to Your Inventory Management

The functionalities and capabilities of outdated inventory management can only go so far. Soon, your business is bound to outgrow the capabilities of an inefficient management system. Think about it, pen, paper, and spreadsheets are enough to track the details of a handful of parts. However, tracking the SKU’s and VINs of thousands of inventories is hard once a business grows out of a warehouse into large facilities.

One of the advantages of a modern digital inventory management system is that it allows you to scale your operations. For example, you can have a modern digital inventory management system with 30 trucks. Once you have grown to 300 trucks, scaling such a system is as easy as onboarding the new trucks to your system.

10. A More Organized Warehouse

A disorganized workplace affects productivity. It sucks the life out of even your most motivated staff, leaving them unproductive and unmotivated. Well, this is one of those problems you’ll never have to deal with if you run an efficient inventory management system. Indeed, effective inventory management makes having disorganized warehouses and stores almost impossible.

Among other capabilities, effective inventory management will help you organize your:

  • Parts according to their distributor
  • Spare parts according to the urgency of use
  • Parts according to the type of vehicle

Such a system enables you to know exactly where each part is. Above that, it helps you know your most used spare parts enabling you to store them within reach. Moreover, effective inventory management allows you to reduce clutter in your warehouse by avoiding the excess and obsolete stock.

11. Automate Mundane Tasks in Your Warehouse

A warehouse manager working on inventory management.

One of the best advantages of embracing a modern, effective inventory management system is that it allows your warehouse to reap the fruits of automation. Some of the hidden costs of redundant and repetitive tasks include:

  • Exposes your teams to unnecessary injury
  • Is labor-intensive
  • It wastes time and may have you paying excess overtime

Doing the same task repeatedly is tiring and demotivating hence reducing your team’s productivity significantly. An effective inventory management system automates this task. Your system will handle report writing, calculating stock, record-keeping and notifications. This system then leaves your team with oversight and supervisory roles, making them more productive.

12. Continuous Operation

A shortage of a part that’s crucial to your business can bring your entire operation to a halt. Say you don’t have a scarcely available part for your trucks that will take a week or two to source or purchase. This scenario might impact your operation significantly. You may have to part with significant resources hiring other trucks or have to delay your customers and face the reality of potentially losing them to your competition.

With effective inventory management, the prospect of such a situation occurring are minimal. Modern and digital inventory management systems will notify you whenever you’re running out of essential stock or when you approach a seasonal shortage. This will go a long way in ensuring that you run a continuous operation regardless of the external shortages your business operates with.

13. Reduces Your Wage Bill

Employees are some of the most expensive costs that a business like yours can accrue. You, indeed, have to pay salaries, overtime, insurance, benefits, taxes, and other employees that manage them (and their remuneration) on your behalf.

That said, it’s in the best interest of any business to have the fewest possible employees working at optimum capacity. That established, poor inventory management, in fact, leads to an inflated wage bill. That means your warehouse ends up having many employees, working at minimum productivity on repetitive tasks.

Check Out Part 3 to Learn More About Inventory Management

You may have one sourcing the parts, another doing calculations on the inventory, as another collects metrics and writes reports. Oh! Let’s not forget the one who manages all of them on your behalf.

An effective inventory management system automates these tasks and empowers your employees to be as productive as possible. Read Importance of Inventory Management Part 3 here.

Missed the Importance of Inventory Management Part 1 and 2? You can find Part 1 here, and Part 2 here.

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