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How to Avoid an Inventory Meltdown

By: Outright


The most common cause of inventory management breakdown is a failure to be consistent, timely, and accurate—simpler put, a failure to “keep up with it.” Whether you manage your inventory manually or you utilize an automated system, you won’t enjoy the desired results of inventory management unless you keep up with the procedure. It’s much harder—but not impossible—to take control back once you’ve lost it.

Don’t Over-Complicate Inventory Management
If it takes too long, or the process is convoluted, it’s much harder to ensure employees consistently follow through. Many smaller companies use something simple, like Excel—and while there are many downfalls to using Excel over a real inventory or warehouse management system, it’s by far better than not using anything at all. Ideally, the only things you need to track are location and item. You can get into tracking users, time, add or remove reason, and more, but the most important thing is making sure you know how much inventory you have, what it is, and where it is. 
Use Locations to Save Time and Money
Keeping inventory in order by name or alphabetically can be acceptable for smaller inventories, but isn’t a sustainable method for growth. The problem with such a method? You end up physically re-allocating the inventory constantly so as to keep similar items together; this is an enormous waste of time and resources. You don’t want to have extra touches if you can avoid it. If you use a location-based inventory management system, you eliminate this waste, as you’ll no longer need to keep similar items together. You can put new arrivals in any free space, since you’ll always have a way to see where it is when you need it. 
Invest in the Right Equipment
Make sure that the equipment your warehouse workers use can be easily carried or transported throughout your warehouse; having to go back and forth to a stationary computer after every pick or inventory change isn’t practical, and it certainly isn’t time efficient. Scanning barcodes is another huge time saver and human error prevention technique—you can get reliable corded barcode scanners for under $100. A good inventory system doesn’t force you to use a particular device or operating system, and can work on any device with an internet browser. You don’t need to invest a ton of money into equipment, but good equipment will pay for itself in human error prevention and saved labor hours. 
Get your Employees on Board
Garnering your warehouse workers’ opinions when going through the process to acquire or devise a system and procedure can be extremely useful, and will help ensure that they’re more on board when you do implement a system. It also helps to discuss and make clear the issues you’re trying to solve to make their lives easier. No more searching hopelessly for inventory, no more moving stock around pointlessly, and so on.
Make Sure Employees are Trained, Tracked, and Held Accountable
If a user knows everything they’re doing is recorded, they’re more likely to pay attention and do it correctly; this level of accountability is useful for multiple purposes. The ability to track what happened in the past and see user performance reports is essential for employee performance reviews. The ability to identify who may need more training or who is most productive so they can get incentives is also valuable.
The most important steps to avoiding an inventory meltdown are simple enough—but once again, the most important thing is to follow through. Start by clearly identifying your process and procedure and how you’d like to improve them, be it with a more formal manual system or an inventory management system. Ensure your team is fully trained, comfortable, and understands the reasoning for the change. After the procedure is in place, management needs to do random audits and follow-ups to confirm that employees are utilizing it correctly. If you keep on top of the procedure, you’ll be able to better focus on managing, sourcing, and, of course, selling your inventory.

This article was originally published by Outright.com
Andy Eastes is the CEO of Agile Harbor. He’s been active in the eCommerce community for 10 years, and has a passion for increasing efficiency for eCommerce and wholesale businesses. Agile Harbor’s latest venture, SkuVault Warehouse and Inventory Management System integrates with ChannelAdvisor, ShipWorks, and Shopify to reduce out of stock percentage, simplify inventory, and free labor hours.

Published: October 21, 2013

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