Common Inventory Management Mistakes that Can Hurt your Business
MRO inventory is arguably the most important part of manufacturing and trading business. To keep business up and running, it is important to have sufficient MRO inventory in the warehouse or storage room. Without an effective MRO inventory management in place, it will be difficult to run operations smoothly. However, inventory management is complex - as is not just limited to procuring inventory needed but also involves organising inventory so that employees can find the right spares when they need. Another important aspect of inventory management is selling obsolete inventory and making room for active inventory.
As one of the leading e-marketplaces for genuine and unused MRO spares, we share common inventory management mistakes so that you can minimise costly discrepancies:
Human error: All business processes are vulnerable to human errors and inventory management is no exception. For instance, employees taking items without creating work orders or misplacing inventory can lead to discrepancies. Inventory management errors, if happening too often, can cost you significantly in the long run.
Inadequate training: When employees do not receive adequate stock-handling training, they are more likely to commit mistakes. It is important that standard operating procedures (SOPs) are communicated to all employees and they must receive proper training in following them.
Wrong data entry: In many small to medium-sized businesses, employees manually key data into spreadsheets. Pressing a wrong button or mis-reading information can lead to procurement of the wrong product or right product in the wrong quantity.
Incorrect picking method: The process of retrieving inventory from the warehouse requires both speed and accuracy. The amount of time and effort it takes to get inventory from the warehouse can significantly affect productivity levels. There are too many picking methods and if a worker chooses the wrong one it can lead to data inaccuracy. To support an efficient, profitable operation, identify appropriate picking methods and make sure employees are well-trained in that.
Unorganised warehouse: For proper inventory management, it is important to have a well-organised warehouse. A mismanaged or cluttered warehouse not only makes it difficult for employees to find the right inventory but also leads to incorrect accounting. For proper inventory management, make sure that the warehouse is uncluttered and all the items are properly labelled.
Poor communication: Lack of communication between warehouses about what inventory is being added and what is exhausted can lead to data discrepancies and poor decision making.
No physical audits: In the absence of proper audits, businesses run the risk of overstocking. Excess inventory often goes obsolete or expires.
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