Ordering products is what you do to keep them in stock. Maintaining equilibrium in your inventory quantities is a big challenge that you can handle with a manual or automatic order management system. Let’s discuss these two options’ strengths and weaknesses in order to decide which one is ideal.
Businesses are constantly cycling through parts and other materials. Whether you’re selling items to customers or consuming them in everyday processes, they’re always running out and needing to be replaced. If you reorder parts manually, you have to be constantly on the lookout for low inventory. Cycle counts are practically a daily occurrence.
This can lead to many problems, such as shortages and overstock. If you don’t know how much inventory you have in stock, you might be running dangerously low on certain items or else you might have over-ordered and now have too many items for your warehouse to handle. Both options can lead to unnecessary expenses.
Set up automatic reorder points on every single item in the warehouse. A reorder point is a minimum quantity that, once reached, instantly triggers the system to generate a purchase order to reorder a sufficient number of parts to replenish them and bring them back to a safe level. Isn’t that better? In addition, an automatic system allows businesses to constantly update their inventory records through barcode scanners and other devices, reducing the need for cycle counts and improving the accuracy of inventory quantities.
Automatic reorder points help companies maintain the right number of parts in stock at all times. There’s a much lower chance of running out of parts or having far too many. Shortages can lead to upset customers and lost sales while overstocks can increase carrying costs and lead to other expensive logistical problems. They are best avoided.
Robert Lockard is a copywriter with Fishbowl. He writes for several blogs about inventory management, manufacturing, QuickBooks, and small business. Fishbowl is the #1-requested manufacturing and warehouse management software for QuickBooks users. Robert enjoys running, reading, writing, spending time with his wife and children, and watching movies.