5 Easy-to-Execute Ways to Improve Your Inventory Control
Time and resources are maxed out in most businesses. As a result, tasks like improving inventory control are often delayed to the detriment of efficiency. Poor inventory control directly impacts the bottom line and erodes customer satisfaction in delivery of new products or replacement parts.We all agree this is an important function, but how can we get it done with so many other demands in our daily operation? Rather than view an improvement program as a large, insurmountable task, let’s look at some simple, easy-to-implement projects that are not too time-consuming, don’t take endless planning, and involve little or no investment of cash.
1. Manage by Wandering Around
Tom Peters’ concept of “Management by Wandering Around” is perfect for inventory management improvement. You can’t begin to improve inventory if you don’t see on a daily basis what’s happening on your plant floor. A stroll through the factory a few times a week, at different times of day, can give you a snapshot of how inventory is being used, where there seem to be bottlenecks, and how workflow is implemented.
2. Talk to Off-hour Staff
An engineer who comes in during off-hours to help a customer get a part on an emergency basis is not thinking about inventory control. He or she is focused on getting a job done and will often grab what they need from inventory without going through your fabulous software system. This is especially a problem in small businesses that don’t have inventory staff on hand 24/7.A 15-minute time investment can solve discrepancies between actual parts counts and inventory software reports.
3. Recognize That People Are Often the Weak Link
No matter how sophisticated and comprehensive your software, human error is often the cause of problems in inventory management. Someone in a hurry grabs a part and thinks they’ll document it later. An interruption comes along, and that never happens.Be sure new recruits are properly trained in inventory procedures, and conduct reviews periodically for staff. Rather than treating it as remedial training, present it as an opportunity for staff to give you ideas to improve your systems. You don’t have to implement everything discussed, but it’s the people in the trenches who often see the path to improvement. Keep inventory control at the forefront of everyone’s mind, and they are more likely to follow procedures.
4. Separate Out Obsolete Inventory
The minute any inventory becomes obsolete, whether it’s a component in a manufactured item or a finished product in a retail store, it should be taken into a physically separate area of your warehouse or storage area. It’s just too easy to confuse old products with new ones.Signage on shelving will clue in staff that this area is special and avoid customer service issues if the wrong part is shipped. The cost of returns goes beyond shipping expense and staff time, to repairing the tarnished customer relationship to avoid a lost sale.
5. Coordinate with Accounting
Since many programs integrate with accounting programs such as QuickBooks, be sure your accounting department understands how inventory control works. In setting up procedures, the accounting function has to be taken into account, as they are the ultimate repository of inventory information. As such, they need to be clear as to how your inventory is ordered and utilized.Improving inventory control doesn’t have to be a daunting project. Think about these easy-to-execute concepts on a daily basis, and soon you’ll reap rewards of increased profitability and happier customers and staff.