The business is getting tightened daily. Everything regarding the business has to be taken care of. Organizations have to concentrate on judicious use of resources. When it comes to the matter about resources inventory plays a prime role in the business. It is highly beneficial in today’s business world to control and manage the inventory as it decides on the success and failures of any business having intense competition in the industry. Inventory management enhances the business operations with the effective flow of goods and services. The inventory management benefits and the knowledge about its usage are vital for enhancing the product quality, improving the competitive ability, inventory carrying costs reduction etc. It can be done by reducing inventories, service enhancement, and operational flexibility through pull systems. Managing the inventory provides strategies that are integrated into all management controlling, planning and processes which are crucial in enhancing successful management.
Customers face various problems in their daily lives. These problems are called “Pain Points”. Pain points are certain problems that customers or prospective customers of the business are experiencing in the marketplace. They are essentially any specific problem that a customer has to come across along their journey. Analyzing the pain points involves a huge degree of thinking outside the box and thinking from the side of the customers.
The proper control of the inventory has to be ensured in the business. With the global digitization, emphasis should be given for tracking of the processes and activities at every stage of the business. Stock managers face many challenges. High return rates, maintaining stock levels, stock verification are some major challenges among them. Whether it’s a retail business or an e-commerce center, it’s essential to know the pain points, when the matter is about inventory. Let’s discuss the major pain points and ways to overcome the challenges.
1. Demand fluctuation
It’s indeed risky when running a business. The organization has to face plenty of challenges in their daily working life. Fluctuation in the customer demand poses a major challenge for the organizations. This occurs when there is a difficulty in maintaining the stock levels. Seasonal trends, Product substitutions are some of the major problems leading to the mismanagement of stock levels. The stock manager should plan in advance that they have enough supply to meet the matching demand of the customers. For example, a stationary store would look out for the school reopening and ensure that they have plenty of stock to meet the customer requirements. There should also be an effective inventory management system to foresee and manage demand data.
2. Reverse Logistics
Nowadays businesses are facing the problem of product returns. The studies state that about 30% of the products bought are returned. Companies have difficulty in organizing the returned products in order to ensure that they are not mixed up with other products. Stock managers can overcome this problem by designing a separate area for storing the returned products. This will make the smooth work of sorting out the products that are to be resold. By doing this the potential losses can be reduced to an extent. Reverse logistics management is crucial for survival of the business.
3. Inventory control
One of the biggest tasks in the business is to control the level of inventory. Stocks are classified into perishable and non-perishable. Stock managers have to ensure the perishability of the goods that are being stored in the warehouse Actions should be taken to avoid overstocking. The Pareto Principle states that 80% of the profit comes from 20% of the products and the rest will simply cost you money. This principle delivers the importance in maintaining healthy stock levels.
Stock managers have to consider the storage space based on the financial stability and the stock amount. They have to be careful while selecting the products that have to be sold in the market based on the existing trend. Using an Order Management System will help the businesses to identify the current trends in the market and select the right products based on the trends. Costs can be reduced if extra care is given to the stock levels.
4. Inventory tracking
Making the stock availability visible to the customers will give a good grip on the business (e-commerce). It is important for the customers to see the availability of the product before purchasing it. Customers should be enabled with the sharing of inventory level in real time. For example Amazon shows the products are ‘In stock” in the purchase area. Implementing a right Warehouse Management System will lead to higher conversions and profits in the business.
5. One – stop shopping
It’s a digital world and customers are more focused on purchasing their required products from online shopping sites. Nowadays, businesses have more than one outlet for selling their products. There is also a facility of buying online and picking up from stores (BOPIS). Without having proper inventory controls, it will be difficult in tracking the products and stock levels.
Adopting a single platform for controlling and managing the inventory levels will assist both the customers and businesses in getting live information about the products. This will lead to profitability and cost reduction in the business.
It is important to organize the business whether it is an e-commerce or a fulfillment store. The inventory runs your business and the customer wants your products. Therefore it is important to maintain a track on the production, raw materials, finished products and distribution points. This can be done by implementing a Warehouse Management Software in the organization. There is an increase in the usage of Automation in the business, which will save time and cost and will also ensure safety and accuracy in the Inventory Management Process.
The customer behavior also has to be studied from time to time, so that the business will be able to track the changing trends and provide the customer with the exact products.
Digital Businesses have a bright future. Other businesses should leverage the opportunity to earn new customers and gain a competitive edge. With Elvis Business ERP and Retail ERP solutions you can solve your business problems and help you become top among your competitors.
