Customer expectations require smart solutions
It wasn't long ago that paying with Vipps, using Click and Collect, or paying with Klarna wasn't something your customers expected. Neither B2B nor B2C. It took a long time to get goods delivered because there were fewer competitors. We called or emailed, rather than chatting with the provider on their website or on Facebook. If we regretted our purchase, it may not have been so fussy for the customer, but an all the greater operation for the supplier. Technology developments continue to grow.
Today's customers are increasingly demanding and hungry for simple solutions. It applies to your customers, but also to you as a customer of your suppliers again. We expect frictionless systems and closer interaction. All in all a simple user experience. This increasing agility leaves us spoiled. We are already used to things running smoothly. These expectations affect other products we use. Also enterprises with inventory. Despite the inevitable technological development, many companies are still stuck with cross-linked Excel documents, paper invoices and manual order lists that need to be sent and updated in multiple places.
If your systems don't interact with each other, friction and frustration will grow, both for you and your customers. It is simply bad shop and poor customer service to rely on manual routines.
Two concepts that are important to distinguish
Inventory control
Inventory control is about placement, post-order transactions, physical inventory counting, and replenishment. The purpose is to reduce inventories that sell slowly, avoid that the warehouse has too high a volume of goods and to balance the investment values against the consequences of unfulfilled orders.
Inventory management
Inventory management is about ensuring the right number of items, at the right time and in the right place. It includes all tasks related to forecasting, replenishment and shipments. If you have good inventory management, it means that you master fast and cheap post-ordering of goods, well in advance before you know the pulse. In addition, you have an efficient goods reception and an agile way to solve inventory management.
Find solutions to the challenges
Regardless of whether you run your own startup business or are the general manager of a small or medium-sized business, the questions are largely the same:
- How can we manage daily tasks in an even more efficient way?
- How can we provide customers with the best possible service?
Logistics plays a central role when we go into these issues. The gains are huge for those who are able to challenge the way they work today.
Four Common Challenges and Possible Solutions for Inventory Control
Challenge 1: You have too much stock
Managers must decide on an inventory level that balances the risk of running out of goods, up against inventory costs and other downsides of having too much inventory. But how?
Having items in stock is not free. Items left on the shelves run the risk of being damaged, going out of date and ending up with a write-off. Older goods can be hard to sell, tying up values that could have been used in other ways. In other words, you risk reduced turnover and thus poorer profitability.
Possible solutions:
If you have items you need to get rid of quickly, there are several smart measures:
- You can sell your excess items through third-party websites. Even if your earnings won't be as good, you might go to zero. In addition, you will have room for new, relevant stock items.
- You can offer your customers a discount on purchases in large quantities.
- If you don't succeed in reducing your volume with the two above options, maybe it's time to think a little outside the box. For example, you can donate to an organization, event, or school in your local area. It not only brings profit to the recipient, but is also a nice and free way to make your business visible.
Challenge 2: Tracking is inaccurate
It's one thing to know how large volumes of goods you need, but it's equally important to make sure you actually have the volume you need. Here there are many places where the counting can go wrong, both on receipt, when ordering and when counting. Typically, companies try to reduce costs by reducing inventory to the lowest level necessary to fulfill customers' orders. It is an approach that can lead to higher booking costs. The result is a larger inventory that causes your business to miss out on higher turnover.
Possible solution:
There is no single recipe that allows you to find the right stock level. You want to earn as much as possible and have as few expenses as possible. Therefore, you should prioritize tracking your inventory carefully so that you find the perfect balance between revenue and costs. How do you do that?
- Get an overview of all the costs associated with the warehouse.
- Compare these with your turnover and examine where you should be to have balance and control, even in the event of unforeseen events.
Challenge 3: You lack control
It goes without saying that the less control, the greater the likelihood of something going wrong. Either because you are sold out for essential items, inventory does not match the online store or that returned items are not kept correctly in the accounts. If you work manually through all or part of your value chain, you lose both time and money.
Possible solutions:
Real-time information is an important key to control. If you have an inventory solution that constantly provides you with up-to-date numbers across devices and users, you're well rigged to work in sync. Everyone knows what is in stock, what and how much needs to be ordered and when it is best to order it.
Challenge 4: You enter data manually
The ability to anticipate inventory needs is critical to meeting demand. One of the main disadvantages of entering data manually is that at any time your workbook may be inconsistent with what you actually have in stock. This is because spreadsheets limit the ability to analyze historical data quickly.
Only one area where inventory is stored additionally restricts user access. This becomes a problem when several people are in charge of inventory, but only one can edit the workbook at a time.
Possible solutions:
Tear off the patch and say goodbye to Excel. That doesn't mean you should cancel your Office subscription tomorrow, but that you're preparing for a manual to automatic transition. With the right tool, you don't have to guess your way to inventory consumption or spend hours updating various spreadsheets. Instead, you can see the entire database at a glance: what is in stock, where it is as well as what and how much you need to order.
After Inventory Inventory, Comes Inventory Management
Now you've got a few pegs on how to get control of your inventory. We move on to inventory management. With good inventory management, we mean that you have order on the location and volume of items in your warehouse.
What is good inventory management?
- Stock up on the right item
- Finding the Right Goods
- Stock up on the right volume
Efficient and good inventory management provides a clear, up-to-date overview of your value chain. All of these points are all aspects of managing and controlling your inventory:
- What you have in stock
- Reception
- What needs to be ordered
- Tracking
- Sales History
- Inventory
- Procurement
- Turnover
- Shipment
- Postorder
It is important that these functions are performed in the correct sequence in order to have an up-to-date and correct overview of the inventory. Data-based warehouse solutions make it possible to integrate subsystems into one solution.
Three key nodes in inventory management
These three points are the essence of inventory management:
- You have the right item
- You have the right volume of the item
- It's easy to find the item
Good inventory management is important because you risk losing revenue if you don't have a system to support your operations. Lost sales over time lead to a serious decline in profits.
Another problem many companies run into is that they can't find things in the warehouse. It can be difficult to stock the right number of items. You need to have the right number of items at the right time, otherwise you risk write-downs or the item going out of date. These losses can be easily avoided by adopting a warehouse solution that supports your operations and tells you what to deliver, when to deliver and at what price.
- You get a stable production
- You meet the demand, even during the replenishment period
- You avoid losing sales orders
- You keep up with changes in market conditions
Once these four benefits are met, another opportunity also pops up: a greater leeway to be there for your customers. You get occupancy to provide better customer service, which in turn will have a positive impact on your profits.
Customer case: This is how the FoodPartner entrepreneur streamlined every small financial and logistics process with a logistics system in Visma net
FoodPartner entrepreneur Socrates Kalenderidis says that it doesn't help with a lot of experience with food and products if you don't know how to transport the product from A to B. Socrates did market analyses, talked to people and read up to learn how Foodpartner should be better than anyone else in the industry. He quickly realized that the prerequisite was to have a good system at the bottom.
---- Now we're down to a mispick of one per cent. We see the same huge difference in merchandise reception. It's a huge relief for everyone. Now the balance is right, and there is accuracy in both receiving and picking. That is a tremendous reassurance! Socrates Kalenderidis, entrepreneur and CEO of Foodpartner
In particular, Socrates mentions three invaluable advantages of Visma Net:
- The solution is automated
Automation is the greatest joy of them all. Everything flows from purchasing and receiving goods to invoicing and bookkeeping. - Payroll is run quickly and safely
— The cloud allows me to log in from anywhere, whether on desktop or mobile and after a few keystrokes the pay run is done. We have both fixed and variable salaries, in addition to extra time, overtime and hired hours. Visma Net covers all of this. - The little extra in the workday
Software is constantly being developed. I'm gaining energy and just want to work more and learn more! No more stress with punching. Who wants to work like a robot every day? Now I go to work and am happy.
Final advice for companies with logistics needs
Get to know the demand
Before you sit down and get busy busy with various warehouse activities, it is important that you familiarize yourself with the demand. Because in order for you to have an inventory that powers your business, you need to stay on top of what items are most significant to your industry.
It takes time and costs resources, but don't miss the opportunity!
You need a system that matches your ambitions and a solution you can grow in.A long-term perspective creates a successful inventory. It takes time to achieve perfect flow of goods, and you need to have accuracy and discipline as a basis. Inventory may not have been the number one priority when you started your business. But as your business has grown, and continues to grow, you need a solution that doesn't limit you, but helps your business grow.
Those who have transitioned from traditional paper solutions to an online solution that does most of the work for you will get a quick return on their investments. Don't miss the same opportunity to become even more competitive.
Good data can help you with marketing
As soon as you have the answers to the questions above, for example, you can use the insights to drive marketing. When should you be on? In what channels? With control and overview, you may also have the opportunity to dig more into the traffic coming into your web pages. Where does the traffic come from, what are the most popular pages, what items are most often left in the shopping cart? These are examples of insights that your system can provide.
Keep an eye on history:
- When were most of which items sold?
- Was it around a particular holiday, season, or other day?
- What was the weather like, or other relevant conditions, when profits were low?
- How can you work preventively in the future?
