Businesses have a lot to worry about—from inventory management and sales goals to meeting customer demands. But one of the biggest concerns for business owners is inventory risk.
Inventory risks refer to various circumstances that might make a company unable to sell their products due to unexpected changes in demand or a loss in product value. This can lead to lost sales and a decline in customer satisfaction.
In this blog post, we will discuss some common inventory risks and how to avoid them. We will also talk about how a 3PL provider can help you resolve any inventory risks you may face.
5 Most Common Inventory Risks
Inaccurate forecasting can have serious consequences. For example, if a retailer incorrectly predicts that a product will be in high demand, they may miss out on the chance to order enough inventory to meet customer demand. Inaccurate forecasting can also cause disruptions in the supply chain. If a supplier overestimates the demand for a product, they may end up with excess inventory that they are unable to sell.
Solution: The first step is to identify the root cause of the problem. Was there a sudden change in consumer behavior that you weren’t anticipating? Or did you make an error in your calculations? Once you know what caused the inaccuracy, you can take steps to prevent it from happening again in the future. One of the best ways to prevent inaccurate forecasting is to use a predicting software like APS Fulfillment’s real-time inventory software which can help you track your current inventory stock levels.
Short Product Shelf Life
In any business, inventory turnover is important. If items are sitting on shelves for too long, it ties up valuable resources that could be used elsewhere. However, if items are turned over too quickly, it can lead to stock shortages and unhappy customers. Finding the right balance can be a challenge.
Solution: Create a rotation schedule for items so that older items are used before they expire. This can help to ensure that products are fresh when they reach customers. Another strategy is to offer discounts on older items, so that they are more likely to be sold before they go bad.
One of the biggest issues that warehouses face is ensuring that inventory is stored safely and securely. This can be a challenge if items are not properly labeled or organized, as it can lead to accidents or injuries.
Solution: One way to resolve issues with inventory safety is to implement a cycle counting program. This involves regularly checking inventory levels and adjusting as necessary. By staying on top of inventory levels, businesses can avoid stock-outs and ensure that their products are always available to customers. In addition, it’s crucial to ensure that all employees who work in the warehouse are properly trained in safety procedures.
It is essential for businesses that deal with large quantities of goods to have reliable suppliers who can provide them with the necessary products in a timely manner. Unfortunately, there are some suppliers who are unreliable and often do not deliver the goods on time. This can be a major problem for warehouses, as it can lead to production delays and stock shortages. In extreme cases, it may even force the warehouse to close down its operations temporarily.
Solution: It’s important for businesses to carefully vet their suppliers before choosing to work with them. By ensuring that they are reliable and can provide the necessary products on time, businesses can avoid the many problems associated with an unreliable supplier.
Damaged or Lost Inventory Risk
Every year, companies lose billions of dollars of inventory due to damage and loss. In a warehouse, inventory is constantly at risk of being damaged by factors such as weather, poor storage conditions, and mishandling. In addition, inventory can be lost due to theft, errors in shipping and receiving, and natural disasters.
Solution: One way to help prevent these problems is to hire an experienced third-party logistics (3PL) provider. A 3PL provider can provide a comprehensive inventory management solution that includes real-time tracking, receiving and inspection services, and much more. With a 3PL provider in charge, you can be confident that your inventory is in good hands and will be properly taken care of. In addition, a 3PL provider can also help to improve your warehouse’s overall efficiency.
Use APS Fulfillment’s World-Class Real-Time Inventory Management Software
If you’re looking for a top-tier 3PL provider that also features industry-leading real-time inventory tracking software, look no further than APS Fulfillment, Inc.
We offer full-service e-commerce fulfillment out of Miami that includes state-of-the-art warehouse management software (WMS). Get in touch with us and one of our consultants will tailor a fulfillment plan designed to grow your business. Book a consultation by calling (954) 582-7450 or email [email protected].