If a customer is coming to you for service (like installation) or a repair (think smashed phone screen), they're depending on you to make their situation better. And whether you’re one store retailer who offers repairs or you have twenty, full-service locations, inventory tracking is important to your business. Why, you ask? Let me break it down for you.
“Inventory is money sitting around in another form.” – Rhonda Adams
For a Better Customer Service Level & Fix-Time Rate
Having the right parts in the right place at the right time means a better customer service experience offering. There will be no need to turn a customer away or have extended downtime waiting for a part to complete a repair—something that will create a negative experience for your customer. By having the right parts on hand, your overall fix-time rate will improve considerably and therefore, so will your customer experience. It’s a win-win!
To Decrease Your Investment in Inventory
By tracking your inventory, you can do more with less. By overstocking on parts or product, you tie up funds unnecessarily and run the risk that those inventory items won’t be used up before they become obsolete. If you’re unnecessarily overstocking on everything, you’re also taking up valuable real estate within your store. By tracking your inventory, you can avoid having too much of it or running out of stock. This minimizes the amount of unused inventory you have on hand and thus lowers your inventory overhead.
To Help Prevent Against Fraud
While most of us want see the best in people, the reality is that good people are hard to find. If you’re not monitoring inventory it’s easy for parts or products to go missing without you ever realizing it. A disgruntled employee could grab a few items to fix a necklace for a friend or appointments could be missed which leaves a customer hanging. Monitoring your inventory allows you to identify these gaps, reduce missing inventory and no-shows, and shut your fraud holes.
Better Reporting & Visibility into Your Business
If you’re tracking your inventory, you’re at a much better place to assess current inventory balances, balance your accounts, or provide financial reporting. It’s reports like these that also allow for more intelligent inventory forecasting based off data rather than emotion. Instead of than ordering 1,000 fidget spinners because you think it will be cool, monitor your inventory trends and make decisions from there—fidget spinners may be a passing trend and with the data to backup your decisions, you can be confident that you’ve made the right choice. This will prevent you from being stuck with thousands of dollars worth of product that will never move. Key metrics you can monitor include:
- Out-Of-Stocks. The count of out-of-stock SKUs within a specified time period. This helps improve store inventory management and buyer efficiency.
- Shelf time. Meaning time on the shelf. This improves comparable goods, inventory management, and buyer efficiency.
- Repairs by Product. Sales within a specific category. This helps identify trends and the impact of specific products or parts.
- Inventory Turnover. Store sales divided by average store inventory. This determines how quickly inventory is sold within a time period.
“Without data, you’re just another person with an opinion.” – W. Edwards Deming
You can control your inventory with basic spreadsheets that have various columns for product name, item numbers, and quantities but this can be difficult to update. So much information needs to be tracked; what your staff has used, what inventory has been received, and what has been returned, to name a few. Not only is this method incredibly labor intensive and requires continuous manual monitoring, it’s also difficult to share information in real-time and is prone to human error.
Therefore, using an inventory system can be very beneficial and takes the pressure off you and your employees when it comes to tracking what is where. The more automated your system, the less paperwork for your team, and who doesn’t love that? Not only will you avoid the challenges above, managed inventory can also allow you to:
- Set Minimum and Maximum Levels for Auto Ordering. This feature gives you the ability to set up min/max quantities to allow for better inventory forecasting and ordering. When you need to make orders, you can auto-generate purchase orders based off these min/max quantities
- Automate Purchase Orders. With purchase order capabilities, you can order items from a vendor and have them shipped to a certain location. Once products are at a location, you can easily receive them with the click of a button. You can also easily auto-generate tracking numbers at the time of accepting the PO. All this is done in one simple step as the POS generates the tracking numbers so staff do not have to.
- Manage Store Transfers. If you have multiple locations, you need to be able to do transfers between locations to help with stock balancing in order to avoid having to order extra products and carry that cost. With the proper system you can simply use the auto transfer in and out reports to see where you need to stock balance between locations and view if you have an overage or shortage based off your min/max settings or you can create store transfer request to receive an item more quickly from a nearby location as opposed to ordering something new.
- Improved Parts Vendor Relationships. With a proper inventory tracking system, you can also help improve your relationships with vendors. Items are tracked seamlessly and you can easily let your vendor know of your ordering needs or setup ways to auto-order based on your minimum and maximum levels set. This allows you to schedule deliveries in a more streamlined way and ideally save by buying in bulk as well as opposed to one-off orders more frequently.
Pro Tip! Ensure your team is doing inventory counts every day! Everything over $50 should get counted and ideally even be serialized. Some companies even choose to do a $30 threshold.
Inventory tracking should be vital for retailers of all sizes who offer services and repairs, but especially those looking to grow and scale their business. A proper inventory management system can make that step much easier and will be a drastic improvement over the pen and paper manual labor you may be used to.
Want more information on inventory management in repair? Explore how you can become a master of modern inventory by downloading our free guide for retailers.
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