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5 Inventory Management Pitfalls - Building Supply Retailers

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1 Overview Many small to midsized businesses (SMBs) struggle to compete with their big box counterparts because they have fewer resources including personnel, technology, budget, and time. That said, making your resources as effective as possible is extremely important. Inventory management is one of the most vital areas of any business yet often needs the greatest improvement. Struggles in this area can lead to a variety of problems including poor customer experience, lack of visibility across departments, low inventory turns, out-of-control labor costs, decreased profitability, and ultimately, business failure. Here are five inventory management pitfalls that many inventory managers face and how successful businesses can streamline purchasing and inventory processes to drive efficiency, eliminate errors, and reduce costs. 1. Inventory record inaccuracies Manual inventory processes involving physical counts, or disconnected spreadsheets with different data systems, can never really be trusted. Are missing items the result of employee negligence, fraud, or double shipments? Is there a logistics problem tracking the flow of inventory from purchasing to receiving to your store shelves? Important questions constantly go unanswered, and with little time to manually analyze the data, costly issues can drag on for months or even years. Surprisingly, many SMBs do not have inventory recordkeeping policies and processes in place including regular inventory counts, maintenance, and documentation. Results from a recent ECi Software Solutions' customer "Warehouse Management Woes" survey shows that 53% of small to mid-sized businesses conduct manual inventory counts at least once a quarter and 50% of respondents have challenges counting or reconciling inventory. Accurate inventory recordkeeping enables SMBs to effectively balance inventory levels to ensure the proper stock is on hand. The benefits include: • Better customer service • Reduced operating costs • Less stocking labor effort and costs • Accurate product receiving information 5 Inventory Management Pitfalls to Avoid How to improve your inventory management and positively impact the bottom line

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