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Poor inventory management and its impact on your industrial organization
Statistics testify that poor inventory management can significantly harm the factory or the company’s brand, which may lead to short-term financial damage or lower stock prices and may sometimes reach bankruptcy or complete closure.

There are many short-term as well as long-term challenges faced by factories and small and large companies in terms of inventory management.

Some of these companies may face these challenges by modernizing legacy management systems' while others are looking for modern ways to ensure that the business continues properly into the future.

How can poor inventory management affect your manufacturing organization?

When a problem arises in the supply chain and inventory, companies and factories face some consequences; Here are some examples of poor inventory management:

1.    Using old inventory tracking methods such as:

Track inventory manually, which becomes time-consuming and error-prone as activity expands.

It will always be one step away from actual stock levels' which will cause demand problems.

Excel spreadsheets are prone to errors that may cause significant financial losses.

2.   Having a very large:

Reports indicate that most companies have 20%-40% of their working capital tied up in inventory. If you have a large amount of inventory that is larger than orders, you will not be able to meet the orders optimally and also lead to some imbalance in management.

3.   Inadequate reporting and forecasting of future demands:

When companies do not use or cannot access accurate information such as:

Sales trends, best-selling products, customer behavior, and the like, they fall into the trap of asking for too much inventory, which may put companies in the problem of excessive quantities of finished goods and little demand from customers.

Through accurate, real-time reports that can be accessed on all days of the week, it is easier to anticipate the behavior of its customers in the future and accordingly meet customer requests without exceeding their budget.

4.    Consider all inventory of equal value:

Sorting in the case of large inventory is one of the most important factors affecting the success or failure of the inventory management process:

Where we should focus on 20% of the best-selling products when checking inventory, forecasting and reordering inventory based on product sales.

5.    Not investing in inventory and stock control programs:

Spreadsheets can be used but huge errors can occur' Besides this, these programs provide inventory tracking which allows multiple people to work with inventory simultaneously on a large scale.

Good inventory management process steps

The first step in managing your inventory well and coherently is to take stock of what you have and evaluate the speed of delivery of your products
You should set a minimum stock level and consider reordering stock whenever you reach this limit.

·        Find the right POS system:
The most important feature of the point-of-sale system is that it helps you better manage inventory. When you have your own point of sale, bar code scanning and built-in inventory
management, products are automatically deducted from inventory when they are sold, so you do not have to do it manually.
Some point-of-sale systems alert you when the stock of some items is low and will complete purchase orders for you, saving you a lot of time.

·        Developing an inventory control system:
Since having a full-time store manager is a cost that small companies and factories will not be able to afford, technology can solve this problem and take care of a lot of repetitive work.
However, it may be beneficial to work with an inventory control consultant who can help you draw up a reasonable inventory control strategy and system to assemble the tools
you will need to implement it.