Does your distribution company need better inventory management software? Here are 5 signs that you to make a change:
- Running Out of Inventory
I think every distributor would agree, if you are running out of products, you need a better way to track your inventory. If you are overselling things, if you are promising product to customers and your warehouse is coming back and saying they don’t have it, or can’t find it, that will have a huge impact on your business.
The right inventory management software will quickly show you how much you have, and where it is. Even if you have multiple warehouses.
- Too Many Quantity Discrepancies
At the end of the year, every tax accountant is going to want you to count your physical inventory. If your warehouse is consistently coming back and you are getting hundreds or thousands of units, or dollars, that need to be adjusted every single time, then something is going wrong. Something isn’t being tracked properly.
The right inventory management software will allow you to find those items that require constant quantity adjustments (you especially care about negative adjustments). Any items with constant quantity discrepancy could be targets for shrinkage, including theft, and should definitely be tracked more carefully.
- Questions About Quantities or Values
With the right inventory management software you will have access to the right reports to enable you to make strategic decisions that impact your supply chain.If you have frequent questions about your quantities, or values it means you do not have access to the level of reporting that you need. You should be able to quickly and easily see reports to show what you have now, what you used to have, what you did with it. The better you set up the reports, the better the information will be.
With the right inventory management software you will have access to the right reports to enable you to make strategic decisions that impact your supply chain.
- Too Many Manual counts
The right inventory management software will keep your manual inventory counts to a minimum.Manually updating your inventory like that can be painful. An inventory management system may not necessarily stop your need for manual inventory counts because the system is only as good as the information it gets but, it will help you narrow them down. You should be able to see that a count was just done a month ago and there were no variances. So next time maybe you can go 6 or 8 weeks in between counts. That will save the manpower that was off your floor counting inventory.
The right inventory management software will keep your manual inventory counts to a minimum.
- Overstock Issues
Running out of inventory is bad, but having too much inventory is also a sign that something is not right. If the people in charge of your purchasing don’t have a proper inventory management system to rely on they will not get accurate data. It could tell them to buy when they don’t necessarily need to which can result in some serious overstock situations. A definite downside for being overstocked is that you may have to sell your product at a loss just to make room for inventory that you actually needed. There are just as many costs and margin ramifications of having overstock situations as there are in running out of inventory.
The right software will how you compare how many units you are carrying with your historical sales (to estimate a potential overstock situation), open sales (to verify that you have enough product to cover current demand) and open purchase orders (to make sure that you will have enough without over ordering).
Microsoft Dynamics GP is the right software to fit each of these needs, and more.
Find out more ways that Microsoft Dynamics GP for Distribution can help your business in the white paper, “10 Questions Every Distribution Company Needs to Ask Before Buying Accounting Software.”
If you are a small or mid-sized distribution company looking for similar benefits, contact CAL Business Solutions. 860-485-0910 x4 or firstname.lastname@example.org. We can help you evaluate your current systems, business processes, and goals to determine if Microsoft Dynamics GP is the right fit for you.
By CAL Business Solutions, Connecticut Microsoft Dynamics GP Partner, www.calszone.com