In today’s world of instant gratification, inventory management is a large contributor to customer satisfaction. Customers expect to order an item and have it delivered immediately. Many people wait until the last minute to order gifts for special days, or have limited time to shop thereby needing quick turnaround on purchases.
While inventory management is not something that customers see, it still has a large influence on outstanding customer service. For retailers, achieving customer satisfaction is a high priority. Happy customers will return for future business as well as refer people to your business. Effective inventory management will improve the customer experience, while mishandled inventory management will drive customers away. Here are some tips for better inventory management:
1. Counting and Labeling Inventory
Whether you own a brick-and-mortar store or online store, effective inventory control will keep customers coming back. It is important to maintain an actual count of what you have in stock: Counting actual inventory and labeling it properly for tracking will help you fill orders more readily. When labeling inventory, create a system that is simple to maintain and input to your inventory software.
2. Training Employees
Most employees do not understand the importance of accurate inventory tracking. However, by linking accuracy with customer satisfaction, you can give your employees a better set of goals to strive for. During employee training, offer small rewards for accuracy and give them the opportunity to read customer reviews that relate to inventory. Empowering employees to create a positive customer experience is a win-win result for everyone.
3. Partner with Suppliers
Working directly with suppliers to manage lead times and fill orders on an as-needed basis through a partnership will help manage inventory flow. While it is impossible to predict every supply issue, a good communication system with your supplier will allow you to anticipate problems and find alternate sources of inventory.
4. Maintain Accurate Spreadsheets
With electronic tracking, it is easy to assume that your spreadsheets are always accurate, however computers are only tools and they can misinterpret data from time to time. Errors in spreadsheets can cause financial disasters as reported in Merchandising Matters. Errors can also be caused by human mistakes such as transposing numbers or accidental duplication or deletion of keystrokes. Implementing a fail-safe system to look for inaccuracies or to double check inventory input can potentially save money and future business headaches even in the smallest of businesses.
5. The Right Software
There are many software choices for inventory tracking. Each industry has a favorite software choice, however the most important criteria for selecting software for your company is how well it works for your business needs. When choosing software, ask for a trial period and have several people in your operation test it for accuracy and efficiency.
6. Inventory Consultant
Hiring a highly regarded inventory consultant is a good way of getting an objective examination of your inventory system, finding leaks or potential weaknesses that you may not see. A third-party assessment may reveal problems that you overlook because you have always worked within your particular system. A consultant can also give you advice on what to consider as your company grows, how to eliminate inventory loss and preventing typical inventory issues that seem cyclical in your industry.
7. Inventory Turns
Maximize your inventory space by studying how your inventory turns. Reducing slow-moving and increasing fast-moving inventory items will lower your inventory cost and improve your sales. Even if your gut tells you that customers love widget X, if your metrics show that in actuality widget Y is a faster moving product, then widget Y is the one you should be stocking in higher numbers. You may find that widget X is not a good product at all. You can also learn more about your customers by surveying them about why they bought widget Y.
8. Follow the Data
Your metrics will tell you how your inventory moves, where it goes, when it needs to be better managed, and what to eliminate. Use the hard data to improve your inventory management and you will improve your bottom line, retain more customers and get increased referrals.
About the author:
Don Amato is Vice-President, Sales of Chicago Tag & Label in Libertyville, IL. Business owners use the company’s forms, form labels, tags and labels to streamline day-to-day processes and work more efficiently.