How much does inventory damage cost your enterprise? Have you taken the time to define these costs and their impact on your bottom line? More importantly, do you know why damage occurs so frequently within your warehouse? When answering these questions, think of the high costs of managing a supply chain with manual processes. Think of the number of data entry errors that occur as a result of managing inventory via excel spreadsheets and tables. Think not of how fragile your inventory is, but how purchasing more than needed forces your warehouse personnel to overstock shelves with huge volumes of finished goods your company has no orders for. Ultimately, think of how much more damage is likely to occur the longer you hold that excess inventory.
Surprisingly, inventory damage occurs for some of the most mundane of reasons. It’s not always because of poor handling practices. It’s not always due to poor delivery methods. In a large number of instances, damage occurs simply because companies have an antiquated and outdated inventory management process. They ask their procurement department to decipher sales forecasts that are predicated on manual data entry processes. There’s no way to reconcile inventory with sales forecasts that lack historical data, and or seasonality adjustments for slower and busier times of the year. It’s a recipe for disaster and perhaps the single most important reason your enterprise must upgrade to enterprise mobility solutions. So, how can moving from manual inventory management to an enterprise mobility software platform help your company eliminate the high costs associated with inventory damage?
Why does inventory damage occur?
Before answering this last question, it’s important to understand why inventory damage is so damaging to a company. When damage occurs, companies typically have the choice between reworking that inventory, scraping it entirely or trying to sell it for scrap. Worse yet, some companies hold that inventory indefinitely, in the hopes that some customer will be incentivized to buy it. Regardless of the outcome, it’s a guarantee that the company has lost a substantial amount of money. However, inventory damage doesn’t simply mean the existing inventory is damaged. If the company doesn’t properly remove that damaged inventory, then it’s a foregone conclusion that it will occupy valuable warehouse space and cause further damage to incoming shipments of finished goods. All of this happens simply because companies ask their internal departments to manage the company’s supply chain and warehouse in real-time, without actually having access to live, continuously updated software. It’s an exercise in futility!
Enterprise mobility software solutions
The right mobility software platform can make inventory damage a thing of the past. Granted, you must have proper inventory handling procedures, but once you’ve established those procedures, your software package will enable your warehouse personnel to properly stack and store your company’s inventory of finished products, raw materials and spare parts. You’ll no longer have to worry about the high costs of purchasing too much and subsequently, not having enough physical warehouse space to store those parts. Your inventory will become more accurate and you’ll be able to dollarize every square foot of warehouse space, further empowering your team to reduce costs.
Your company can further reduce incidences of damage by providing your warehouse personnel with rugged handheld computers. They’ll be able to check inventory counts quicker, reconcile inventory faster and ultimately be able to track incoming and outgoing shipments of finished goods more accurately. Manual inventory methods are simply too problematic to be counted on. They lead to key entry errors and inaccurate inventory levels. However, when the entire company works from one point of reference, then its entire inventory is more easily managed.
Most companies assume that inventory damage is simply a cost of doing business. Or, that somehow it doesn’t have nearly as big an impact on their bottom line as everyone thinks it does. This often happens when companies have manual processes. Instead of directly confronting the issues, these companies rationalize their severity because they lack the tools to reduce the impact of damage. Inventory damage is incredibly costly. That cost goes directly to your bottom line. It’s not imaginary and the costs aren’t exaggerated. Instead of ignoring these issues, isn’t it about time you upgrade your internal operations and workforce with mobile handheld devices? Isn’t it about time you upgrade your operations with an enterprise mobility network that makes the high costs of inventory damage a thing of the past?