What are some inventory management myths?
In some facilities, inventory management tends to become a collection of practices that one generation hands down to the next. The procedures they pass on are not always true nuggets of wisdom, so it’s best to look into inventory best practices for your industry. Here are a few myths to be weary of when it comes to inventory management:
“Buying in bulk reduces costs.”
Some items bought in large quantities can significantly reduce unit costs. This is most evident in everyday consumable items that your facility would regularly use and replenish. However, this is not exactly true for all spares that you are keeping in stock.
Spares that are not changed out too often or spares with longer expected service pose a greater liability when being stocked in bulk. Aside from the costs incurred by keeping these items at the warehouse, spares stored for longer periods are at greater risks of being obsolete.
“Performing more inventory counts ensures effective management.”
Stopping normal operations to physically count the stock in your facility is not the most effective use of your team’s precious time. Depending on the size of your facility and the amount of inventory that you keep, full inventory counts can take days to complete.
Aside from performing facility-wide audits, it might be a better idea to perform checks per section on a scheduled basis to reduce the impact on the whole operation. Also, a barcode system within your inventory management software can be put in place to track incoming and outgoing items. This will significantly improve the accuracy of the inventory data without having to do all the leg work.
“I can effectively manage my inventory manually using a spreadsheet.”
Spreadsheets can undoubtedly perform calculations with ease. However, they are not exactly designed to track changes in data with real-time accuracy across multiple users and assets.
The reality is that managing inventory using spreadsheets is a labor-intensive task that requires an operator to enter all the data manually. This causes most spreadsheets to be vulnerable to errors.
“Getting the newest software solves all inventory problems.”
Here’s where it gets tricky. It is certainly true that manual tools such as spreadsheets that are prone to errors and are not the ideal tool for real-time data updates. However, it is also true that the latest and most advanced inventory software available does not always equate to effective management.
Inventory management software is a valuable tool that enables you to get visibility on the status of your stock. It provides you access to data that you can then use to strategize actions to maintain optimized stock levels. Using the software to its full potential is the key to managing inventory.
“Inventory software is too expensive.”
With all the features that an inventory management software has to offer, potential users might expect outrageous costs to get the service. This expectation is probably true a few years back when traditionally, software solutions designed for corporations came with big price tags. Expensive inventory management software has started to become a myth with the rise of cloud-based applications that allow users to subscribe only to features applicable to their operations.
Upkeep, for example, includes inventory management and barcode scanning features in its Starter pack, with options of increased functionality as the business would require.