5 Benefits of Inventory Control
Updated: Sep 7, 2018
It has been my experience (‘IHBME’, below) that inventory control provides benefits far beyond simply having individual item control. Let’s take a look.
1 - Inventory Control Saves Money
IHBME: Inventory is an Asset…until it isn’t. And the more you have on-hand, the higher your potential waste will be. Why: When a ‘new, improved’ item becomes available, you are stuck using up your excess older items. And if an item becomes obsolete, it can result in a total loss. That’s why—as a general rule—the less inventory you have, the better off you are.
2 - Inventory Control Saves Time
I have seen situations where a stockroom was so overstocked and disorganized that no-one could find what they needed. So every time they went to find something—or to order something—it took 10X longer than it should have taken.
3 - Inventory Control Reduces Labor Cost
IHBME that the labor cost involved in carrying too much inventory results in 2-3X the cost of having everything at the right level and in it’s proper place. This observation is based on working in a warehouse for a big box retailer. That loss of time can never be recovered. And the resulting level of frustration is hard to overestimate.
4 - Inventory Control Enhances Customer Service
Whether you have ‘real’ customers (in a retail or hospitality environment), or whether your ‘customers’ are members of your group or team, not being able to take care of that person’s needs can have devastating effects on your business. If you have too little inventory to meet your needs, or have too much inventory that is aging, it can result in disappointing a ‘real’ customer, or prevent a co-worker from being able to do their job properly. IHBME that either way it will result in a loss to your business.
5 - Inventory Control Reduces Waste
IHBME that having improper inventory control means that you won’t have the funds needed to buy inventory that you really do need…your assets will be tied up with your stagnant inventory. By having the right inventory levels—and the right inventory mix—then your money is working for you, not being wasted.
Do yourself a BIG favor…get your inventory under control.