No company likes losing money. It is especially frustrating when the money is lost due to employee or customer theft, spoilage of product with expiration date, or breakage due to carelessness or an overcrowded warehouse. The right inventory software package will include the controls you need to stop inventory related losses due to theft or wastage. Find out more in this article or get your customized inventory software search started here.
Don’t be a victim
In the US, each year billions of dollars are lost in product theft. Product theft can be a customer walking into a retail store, putting product in their coat and walking out to an employee walking out with inventory. During the latest recession, companies saw in an increase in product theft. People still need/want the product but no longer have the funds to pay for those items. Parents are under pressure to provide for their families, employees whom have had to make sacrifices at work see they are “owed” something and the business is the one that loses.
Now, more than ever, it is important to maintain lean inventory; stocking what you need and no longer carrying mass amounts of product that isn’t selling.
Waste not, want not
In addition to theft, spoilage is another major cause of losses. Watch an episode of Gordon Ramsey’s Kitchen Nightmares and you will see instances of product going to waste in coolers. This is partially due to mismanagement but also due to the fact that they don’t have an accurate idea of what menu items are selling and are over purchasing.
Spoilage isn’t just found in the food industry. While it is a major area of spoilage due to the shelf life of product, manufacturers and distributors also have to worry about product expiring. Chemicals can become ineffective after a certain date and having too much of a product on hand when that expiration date arrives means money down the drain.
They broke it, you bought it
Product breakage is another form of inventory loss. Too many items on the shelves can lead to product falling off shelves, stacking product too high can cause packaging to collapse and ruin the product, product on the floor (not in designated inventory location) can be ruined by a pallet jack, fork lift or a careless employee. Worse yet, it is a safety issue. An employee accident could not only damage the product losing money on that item, an injury could result in medical bills, lost employee time, etc., that cost the company much more than the loss of the product.
Having a proper inventory control system will help reduce theft, spoilage, and breakage. In all instances, reducing the amount of inventory on hand will greatly reduce the chances of losses.
- First track product sales. Use the inventory to know what items are moving and what items are staying stagnant. Forecast your inventory needs with sales and determine what products are needed for the near future.
- Identify products that are going to move quickly to ensure there is enough product on hand to meet the customer needs, but also allow you to track those items in greater detail with cycle counts. The more individual items of a sku, the better the chances of losses.
- Identify which products are not selling to liquidate those items, reducing the chances of theft and reducing the chances for breakage.
A strong inventory control solution not only helps you identify what is in stock, it also helps identify losses. The inventory control solution is an important tool that will help protect your assets.
- Reducing theft will increase profits
- Inventory tracking allows you to move expiring products or remove from inventory
- Properly locating inventory leads a safe warehouse and reduces risk from accidents