5 proofs that poor inventory management is costly

22 December 2021

5 proofs that poor inventory management is costly

Inventory management is essential regardless of your industry, the product you sell and the size of your business. Poor inventory management can hurt your bottom line - your cash flow and your profit.

Many current assets are essential in the preparation of a balance sheet:

·       The inventory

·       Stock management

It is important that inventory is converted to cash (sale) as quickly as possible to cover short-term expenses.

The importance of inventory in inventory management

The longer the inventory stays in its original position (on the shelves) the lower the productivity and profitability. Maintaining inventory, utilities, storage, and storage space are costly operations for businesses.

It is therefore important to maintain stocks at optimal levels and to have effective tools and processes. The goal is to limit excess stocks but quite simply to manage stocks, sales and orders and replenishment for a quality of stock.


Poor inventory management : disruption


A company which does not proceed with a good means of inventorying data, products and goods in real time loses productivity and therefore runs up against lower results on inventories.

·       Higher costs: the longer the stock stays on site, the higher the costs / Inventory and data management is essential to prevent a company from sourcing too much and to limit or even eliminate dead stocks.


·       Lack of sales: it is necessary to regulate stocks: having too much will cause you to increase costs while having too much can cause you to lack potential sales. Real-time data and reports allow businesses to assess inventory levels and predict how much and how much is needed for their inventory.


·       Replenishment of goods is inefficient: having too much stock of goods does not allow companies to assess the quantity and time of replenishment.


·       A skewed balance sheet and uncertain cash flow: good inventory management optimizes inventory levels to sell as much as possible and therefore free up money to meet business expenses and debts.


·       Storage and real estate: too much storage of goods leads to a loss, not of money, but of space since excess goods must be managed and stored.

Solutions : implementation of simple processes


·       Organization of storage space:

In warehouses as well as in stores, you gain in productivity if the goods are correctly organized to easily locate the products. It also makes it possible to learn about the products which are the least sold, which take up space and therefore increase the cost of storage.


·       Ordering and purchasing practice to improve inventory visibility

Good management of storage spaces allows visibility of the available parts, those needing maintenance and repair. An effective inventory program enables increased purchases, reduced unnecessary costs


·       Ensure an efficient and reliable inventory by training your technicians

Your employees and technicians must be able to recognize all the parts, including the one that has a low turnover


·       Automate your inventory management with a practical management solution


It will allow you to automate its processes:

- Replenishment: minimize tedious tasks

- Integrate into your solution

- Management of parts and equipment

Eliminating bad inventory management procedures with the help of an effective strategy has a positive impact on the bottom line of your operations.

5 proofs that poor inventory management is costly

5 proofs that poor inventory management is costly

Monstock is the innovative and collaborative solution that allows you to automate your business processes. Inventory and flow management and much more, the Monstock solution allows you to gain in productivity and efficiency with a real-time view of the data.


For more information: contact the Monstock team.

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