Running a small business often means making tough decisions about how to spend and where to invest your limited capital. From inventory shrinkage to supply and forecasting challenges, an effective inventory tracking system and software is a critical company investment.
If you don’t track your inventory, you have no way of preventing employee theft, and trying to create your own inventory system using a spreadsheet program like Excel is time-consuming, error-prone, and rarely effective.
These days, it is relatively inexpensive for a small to medium-sized business to get its own inventory tracking system with the latest software. When you consider the potential costs of not tracking your inventory, it’s a no-brainer.
Beating Inventory Shrink
In 2014, inventory shrink resulted in over $44 billion in losses for retailers, over 50% of it the result of internal theft, administrative errors, and unknown causes. Internal theft alone accounts for 34.5% of inventory shrink. Administrative errors make up another 16.5% of shrink. These can be significantly reduced through the implementation of effective inventory software and systems.
Eliminating Employee Theft
If you don’t have an inventory tracking system in place your employees will know that they can get away with theft. Eliminating opportunity is often the biggest key to preventing theft and fraud. With a system that tracks where items are, how much you have, and who has used them last, you make it much less likely that employees will feel they have the opportunity to steal or commit fraud.
Administrative errors accounted for 16.5% of inventory shrink in 2014, many of these probably the result of human data entry error or ineffective inventory tracking systems.
When people enter data like barcode numbers by hand they will make mistakes. These mistakes can lead to lost inventory and wasted time tracking down missing items. Barcode scanners eliminate data entry errors and inventory tracking software ensures your inventory data and locations are up-to-date, greatly reducing if not eliminating administrative errors and ensuring that inventory is not lost.
Ending Inventory Uncertainty
Improved Customer Service
Have you ever had to put a customer on hold because you couldn’t tell them if you had the item they wanted? If you have, chances are you’ve lost customers doing so. You can’t afford to be unsure about what you have in stock or not.
Inventory Tracking with Precision Drilling
Robert Gonzales, assistant director of marketing and communications for PCO, explains how inventory tracking software changed their company. In the past, “When our sales representatives received an order, they had to walk through the warehouse to verify whether the items were actually on the shelf. Our employees wasted a lot of time, plus they could not give our customers the immediate response they deserve.” After switching to inventory software, Gonzales said, “We have effectively cut our inventory operating costs in half. The product easily paid for itself in the first month.”
Effective Inventory Forecasting
Precision Drilling’s Niksu Support Center near Edmonton, Alberta, Canada, provides maintenance, repairs and overall (MRO) to the $900-million-plus company’s equipment. They need to have supplies on hand and they need to know where they are. They also need to place orders to align with long shipping times, so forecasting is crucial.
Lee Letawsky, parts technician and purchaser, was using Excel to try and manage inventory, but eventually switched to Wasp Barcode’s Inventory Control. He explains the difference, “If you’re not in control of your inventory, you don’t know what you have,” said Letawsky. “There’s so much money tied up in equipment, you really need to know and track your inventory. This system has saved tens of thousands of dollars, improved the repair process and made my job much more enjoyable. It’s easily paid for itself in less than six months.”
Using barcode technology and the latest in inventory tracking software, forecasting becomes easy as you can immediately see how items and inventory have moved in the past. Understanding and predicting trends will be simple and will save you money.
Eliminate Excel Issues
Using Excel to track your inventory may seem like a good idea and a way to save money when you start your business, but as it grows most business owners find that Excel does not help them. It actually slows them down. It simply cannot do what the latest inventory tracking software can.
When Paul Huffaker, the Vice President at Racesource Inc. was using Excel to track his inventory, his company couldn’t effectively forecast and it was costing them. “Maintaining an accurate inventory count on Excel was time-consuming and error-ridden,” said Huffaker. “Often I would reorder or manufacture parts I already had simply because I didn’t know I had them, which was an unnecessary cost. And with many smaller items being combined into an assembly, I needed a system that could use the existing UPC codes to track the individual item as well as the assembly.”
Quick Tips: Finding the right Inventory Tracking Software
It is important to try and find the right inventory software for your company, here are some quick tips to find and implement the right program for you:
- Identify what you need to track and what kind of reporting you want to have
- Look for systems that can track your needs and update in real-time
- Implement your new system and train employees
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