4 Inventory Management Myths – Exposed!
Inventory management is considered to be one of the major pillars of a successful, self-sufficient business. It is the point where production meets demand – it fuels your business with products you know your customers enjoy.
Despite its immense importance, there are many misconceptions about the practice that keep on buzzing in the air. Before they can go around and confuse entrepreneurs any further, we’re here to debunk the 4 most commonly known myths about inventory management:
Worry about it after starting your business
Planning for inventory after kick starting your business is like running into war without any ammunition – you won’t last that long in the field!
If you don’t come up with an inventory strategy first, then you’ll be met with complications and inefficiencies with your product. One too many such problems, and it could potentially be the cause of your entire business’s downfall. Be sure to implement an inventory management system before setting up store, so that you’re not met with any chaos.
Buying in bulk saves money
It may be a popular belief in the smaller scale, but when you’re talking about running your business, the reality is a bit different.
This mainly because apart from price, you have other things to worry about – quality, lead times, and warehouse storage space and just to name a few.
Perhaps the reason this myth is so believable because some unreliable suppliers follow this method – but that does not mean it’s the right one. Most of the times, you’ll be compromising on product quality, just for the sake of price.
Buying in bulk often means you have to use up storage space exponentially fast, meaning there may come a point of overstocking. This menace further leads to other problems, such as waste of products and dusty inventory. You may have bought those products at a cheap rate, but you’re throwing them away at a larger cost.
Sales forecasting can work without Inventory control
A lot of retailers think they can accurately forecast future sales based entirely on past sales data. That in itself is a huge misconception.
In reality, forecasting is a process that takes into account the future and the past. In order to be thoroughly planned for the future, you need to look into past inventory trends, and see what product was in greatest demand, and which was least needed. Such metrics allow you to maintain stock levels, be prepared for all kinds of trends and keep up with seasonal fluctuations.
So make sure you include inventory trends when working on sales forecast.
You don’t need an inventory management software
This is perhaps one of the biggest misconceptions about inventory management, and we’re not exaggerating. When running a business, people assume inventory is all about counting products, and logging them into a spreadsheet manually. Why invest in a software if people can do it? they think.
It’s time to bid farewell to this line of thinking, because it is far from the truth. No matter how big or small a business may be, you need some level of automation to run work functions smoothly. An inventory management software in Pakistan like the one offered by Oscar POS is capable of updating inventory levels in real-time and give low stock alerts, all while simultaneously preventing menaces like pilferage, overstocking, dusty inventory and more.
Such systems take your inventory to a whole new level.
If we were to sum up this entire article, we would probably say one thing: don’t take inventory management too lightly. It is powerful enough to make or break your entire business in one fell swoop.