According to a research, more than 54% of the supply chain officers will optimize their inventory management in order to help control and organize the inventory and reduce costs. Without a precise accounting or how much inventory items one business owns, where the inventory items are located, and what will be required to complete future orders, no business can run productively to turn a profit and generate development.
The inventory inefficiency is a common problem for many companies. The inaccurate inventory data can lead to a higher lead time which indicates a slower response to inquiries, market changes and modifications, and stock outs. This can create a customer disapproval and dissatisfaction when the items aren’t available or accessible as needed.
For the small and mid-sized businesses, the margin for error is simply too small. If they don’t meet the required demands or don’t satisfy the clientele, they will probably fail sooner or later.
How can the inventory system affect your inventory turnover ratio?
The inventory turnover is crucial for small businesses. It is the cost of items sold divided by average inventory in stock. If the turnover inventory is too high or too low, your business may be overstocking and you will probably find yourself unable to meet the customer’s requests.
A balanced turnover can lead to a better efficiency. This kind of efficiency can be achieved only by adopting an inventory management and control system. This efficiency can even cut payroll expenses since the staff no longer have to spend time and energy tracking down individual orders.
The inventory system is definitely worth the investment!