The Price of Poor Inventory Management: Avoid Making These Mistakes

The Price of Poor Inventory Management: Avoid Making These Mistakes

Having a reliable software for inventory management determines your team’s productivity and your business’s profitability. But inventory management often poses a lot of challenges and pitfalls. Here are some of them: 

  1. Increased storage costs: Excessive inventory requires more storage space, leading to the increase of rent, maintenance and utilities expenses. 

  1. Outdated products: Overstocking can result in products surpassing their expiry date or becoming obsolete, which leads to increased waste of money, resources, and time. 

  1. More risks: With the increase of inventory, the risks of theft, damage or misplacement also become higher, resulting in great inventory shrinkage and financial losses. 

  1. Lost chances for sales: You may lose potential customers and sales chances because of ineffective management, insufficient inventory or understocking.  

  1. Dissatisfied customers: As customers will not find what they are looking for, it is highly likely that they will be dissatisfied with the service offered by you and make their purchase from your competition. 

  1. Strained cash flow: Excessive investment in inventory can restrict a company's cash flow, limiting their ability to fund growth initiatives. Moreover, understocking can result in lost sales and diminished cash flow, reducing opportunities for investment in different areas of the business. 
     

What mistakes are you making in our inventory management and what are the reasons for these pitfalls? 

 

Still relying on manual work

Business owners still rely on outdated methods and manual work to manage their inventory. Thus, they struggle with lack of visibility and lose track of what products are going in and out. Managing your inventory on spreadsheets or local warehousing software that is not connected to other departments or stores leads to more and more challenges. 

The solution is choosing modern inventory management software that communicates not only with the warehouse, but also with the stores and back office. Innovative solutions digitize work processes from end to end, give companies a holistic view over their business and help them make the right choice quickly.  
 

Demand forecasting problems

Product demand is not a constant as it is influenced by seasonal changes, holidays and special events. There are some predictable factors, but there is also moment when businesses do not have much time to react. Thus, accurate forecasting becomes a struggle and the risk of wrong inventory purchases – much higher.  

However, there is a solution to this problem. A system that allows you to plan your procurement and replenishment strategically and based on real-time data so that you avoid risks of over- or understocking. Technology that takes into consideration factors such as the impact of seasonality and holidays helps businesses optimize their inventory management and remain one step ahead. 
 

Too many software systems, no integration between them 

Working with multiple separate systems – one for inventory management, one for finances, another for analysis and reporting – is a recipe for disaster. The chaos brought by the lack of integration between the different systems increases the risks of data inaccuracies, missed sales chances, and insufficient or excessive stock. Moreover, comparing and aligning the data from all the different sources manually is a time-consuming activity that often leads to errors. 
 

These challenges highlight the need for a holistic ERP that effectively handles all inventory management processes, but not only limited to this – it unifies financials, store operations, supply chain, eCommerce, POS and customer loyalty. We offer a solution that covers these requirements: Dynamics 365 Business Central ERP and LS Central. 

Dynamics 365 LS Central is a modern solution that helps you achieve operational efficiency. Say goodbye to manual work, the chaos of working with separate systems, the data inconsistency and the inability to respond to your customers’ needs. Additionally, NavTech Group offers the integration of warehouse management system PocketNAV, which gives users the ability to track their stock through a mobile device and the barcode scanning function. Integrated in Dynamics 365 LS Central, PocketNAV has four standard modules that can be easily adapted to the customer’s business needs: Purchases, Sales, Warehouse and Manufacturing.
 

But let the results speak for themselves:  

Read how the combination of Dynamics 365 LS Central and PocketNAV helped our customer, BulMag, gain complete control over their business

Or another client of ours – Comsed – that manage their inventory processes effortlessly thanks to Dynamics 365 LS Central and WMS PocketNAV  
 

This is your chance to modernize your business and get in line with the trends in business management. Contact us for a demo or consultation. 
 

Source: The high cost of poor inventory management: pitfalls and solutions (lsretail.com) 

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