As your organization does business every day, there are a lot of moving (and nonmoving) parts to keep all facets progressing in harmony.
Two vital elements are your inventory and assets, which make up the vast majority of your business — from your sales floor to the back office and warehouse.
Before we get into the management of your assets and inventory, let’s first look at the definition of each:
- Assets – what you own.
- Inventory – what you sell.
It seems pretty simple when it’s put into words. But the organization and management of raw materials or finished goods in the manufacturing space or the products on retail warehouse shelves – can be complex. It’s even more complicated if you track assets or inventory with manual processes like pen-and-paper or spreadsheets — or don’t manage these parts of your business at all. If this sounds like you, you’re not alone, according to the Wasp Barcode State of Small Business Report.
- 48 percent of small businesses don’t manage inventory or use manual processes.
- 55 percent of small businesses use manual asset management or don’t track assets at all.
When this is true of your company, you can’t trust sales numbers or truly know if your sales staff’s mobile devices are misplaced or have “walked off” some point along the way. Without automated management, human error can add up over time, resulting in inaccurate reports and unhappy board members when sales are down and assets seem to disappear. And in the meantime, customer satisfaction plummets when their favorite item is never in stock.
Asset management: what difference will it make?
Your company’s assets are important. The items your company owns make doing day-to-day routines possible – from desks, chairs, and computers in the front office, to smart phones and scanners for your warehouse and field workers. If you don’t track these assets, you’re likely to lose or misplace costly items or let them get old or outdated. This can cost a lot of time and money.
Nick Heller, production manager at the University of Phoenix Stadium, said this was the case for the production department of the Arizona Cardinals football team. With no asset management system in place, he never knew when the last time equipment was used or who used it last if an item went missing. Often multiple events would be scheduled on a given day, with up to $100,000 dollars of valuable equipment used. It was impossible to keep track of what was where. However, since the crew implemented an asset management system, they have saved five to 20 labor hours per event.
Like the Arizona Cardinals, your company can significantly improve efficiency due to the following factors.
- Better manage asset data: Not only does an asset management system allow you to access records in real-time, but multiple employees can use the system simultaneously on one all-inclusive database, rather than multiple spreadsheets. This eliminates data being overwritten or reports turned in with inaccurate asset information.
- Maintain thorough and accurate asset records: The use of barcode scanners and labels ensure you capture all necessary data accurately, without keying errors.
- Prepare and file reports quicker: Say goodbye to wasted hours sifting through piles of spreadsheets to compile the data for reports. User-friendly tools mean you easily download information. You can even customize reports to meet the needs of whoever needs the numbers — your warehouse manager, CFO, or your company auditor.
- Easily manage change requests: Asset change requests will be simplified to create an approval process. And since data is accurate and updated in real-time, you’ll always have a complete history, which proves especially valuable during an audit.
- Automate asset transfers: And automated asset management solution provides you with the tools to enforce compliance, increase efficiency, and eliminate errors and delays when it comes to transferring assets.
- Maintain assets: Better budget for asset replacement by tracking asset condition and maintenance with easy-to-use logs of the assets you currently have in-house.
It’s time to take “stock” of your inventory processes
As with your assets, you absolutely must track your business’ inventory. When you have a firm grasp on what items are available to ship and what you don’t, it’s near impossible to serve your customers with excellence. That’s the place Process Control Outlet (PCO), an industrial electronics reseller, found itself. Even after being in business 13 years, the company had never taken control of its inventory.
“When our sales representatives received an order, they had to walk through the warehouse to verify whether the items were actually on the shelf,” said Robert Gonzales, assistant director of marketing and communications for PCO. “Our employees wasted a lot of time, plus they could not give our customers the immediate response they deserve.”
Your inventory is the main revenue generator, so why risk losing sales because you simply don’t know what you have on your warehouse shelves.
Here are the benefits — from the warehouse to the sales floor — of a barcode inventory management system.
- Control theft: Without accurate inventory control, it’s impossible to know if missing items are misplaced or stolen by either customers or employees. That is, not until it’s too late and you have to swallow your losses.
- Improve customer satisfaction: Nothing makes an irate customer faster than always being out of their favorite product. Face it, your company has a lot of competition, and that person can take his business elsewhere if you can’t meet his need. An inventory management system helps determine if an item is in stock and helps you locate it more readily. And, of course, it’ll track what items are out of stock and provide all the associated information necessary to re-order.
- Accurate financial management: It doesn’t make sense to go a year without knowledge of your company’s financial health. Inventory systems help you keep track of how you're doing, allowing you to access accurate, real-time metrics throughout the year. So, there are never any surprises.
- Product tracking: From year to year, it’s beneficial to know what sells and what doesn’t. This information helps you plan and make more informed business decisions for the future. You’ll avoid losses due to products sitting on shelves for too long or losing sales because products sell out too quickly for customer demand.
PCO experienced immediate payback through inventory management, to the tune of $35 thousand annually. And inventory costs were cut by 50 percent. Your business can also boost your bottom line by taking control of assets and inventory and setting your business up for success into the future.
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Funded, in part, through a Cooperative Agreement with the U.S. Small Business Administration. All opinions, and/or recommendations expressed herein are those of the author(s) and do not necessarily reflect the views of the SBA.