The importance of proper inventory management cannot be stressed enough for SMEs and any business owner who would want to have full control of their inventory and business.
One may ask why do I need to manage my inventory while I can just record them down in a book and be done with it. As easy as it may sound, counting and recording your inventory without a proper inventory management system in place puts your business’s health at risk.
Here are some of the benefits you can get from proper inventory management:-
1. Increased customer satisfaction
Every business owner’s wish is to get positive feedback from their customers. With a systematic and effective inventory management you as the business owner will have a comprehensive view of the stock at hand and this will result in an increase in customer satisfaction as most customers do not work with late deliveries or out of stock notification. Good inventory management leads to orders being fulfilled more quickly and shipped out to customers which will keep them coming back for more.
2. Business Intelligence
With an effective inventory management, there will be accurate planning as you will be steps ahead and always have the right amount of products at hand by making decisions based on inventory trends which will result in an increase of inventory turnover as the business will optimize the value of goods they have by keeping fewer slow-moving products at hand while increasing stock on profitable products.
3. Better Inventory Planning and Re-ordering
It is difficult to gauge which products are needed if there is no clear way to tell which products are already stocked. Businesses are generally started with an aim of bringing profits to the owner and because of this, you do not want to sell on ‘hakuna’ or ‘imeisha’ basis, you risk losing customers or even prospects, plan yourself by using a proper inventory management system which will allow you to accurately manage your inventory.
4. Cash Flow
Proper Inventory management allows you to manage business cash flow. SMEs are not always able to purchase large amounts of inventory this is due to the limited capital but by having a proper inventory management system you will be able to know exactly how much inventory they will need and when they need it. This can free up other capital to re-invest in other areas of your business.
5. Maximize Profits
By being able to make better business decisions the likely outcome of small businesses will be an increase in profits. This is because the stock in the inventory will only be stock that is selling and any other stock that doesn’t grab customers attention can be deemed obsolete and can be abandoned. This makes the general business practice more efficient.
6. Improves Customer Service
It remains the fact that good inventory management leads to what all businesses strive for, which is continuity. Every business owner’s desire is to keep their customers coming back to make more purchases and even bringing in new prospects. It is necessary to always improve your customer service level enough to be able to match customers’ requests swiftly.
Inventory management is a good practice to all businesses, it is very important to keep a watchful eye on your inventory and it’s best if you do it properly as it will help you to regularly identify and avert any potential inventory challenges and errors.
When you ignore the lifeblood of your business that is having a Dedicated Inventory Management System, you run the risk of destroying your business health. Don’t wait until it’s too late to salvage your business. Start as early as now by making sure you have full control of your inventory and business.
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