How to Avoid Running Out of Stock
Stock outages, what do they mean for your business?
A lost order? Losing a valued customer? Missing a production deadline?
Stock outages, what do they mean for your business?
A lost order? Losing a valued customer? Missing a production deadline?
If this happens more than once does this have an even more devastating effect on your business?
I know the feeling. You are trying to run a business and you have the sales team at you for not having the stock of the product that they have promised to their customers and causing them to miss their sales targets, staff members on your back as they can’t do their job without the parts they require, and even worse, the accountant sitting you down to talk about your poor performance … this is all avoidable.
Keeping stock on the shelves may seem like a simple task but when I am talking to business owners that call looking for a better solution, I hear the pain, frustration, and anguish that these stock outages are causing them.
“The same thing happened last year. We get to our peak time of the year and we run out of stock of our most popular line. We are missing out on easy money, and most probably losing customers because of it.”
Missed revenue, lost customers, and competitors taking your business. You only have to let a customer down once for them to look for an alternative, make the same mistake again and you will be lucky to have them as an active customer again.
I have been implementing inventory, manufacturing, and accounting software for over 20 years now and have seen this happen time and time again as a result of poor systems, and the lack of function in the software being used within the businesses. The results are proven, put in good systems, with good technology and watch your business grow.
“We have been using Fishbowl for just 18 months now. As a result, it has enables us to expand our business and open two now warehouses in two different Australian states.
We absolutely could not have grown so quickly without using Fishbowl in our business”
Andy Lee, Managing Director, Secusafe
You can’t always rely on people, but you can rely on systems and processes. If your staff follow correct processes then your business will flourish. An inventory and order management system like Fishbowl Inventory will put these processes in place for your staff to use and enable you to centralise your business data. This allows for correct and accurate data driven operational decisions every day.
The solution is not to simply order more stock. Having too much stock is just as bad as not having enough and will hinder your ability to have the cashflow available for purchasing the in-demand items. You must get the balance right, and in order to do this you need a centralised system with accurate information for all key staff members to use. Don’t keep this information and knowledge stored in spreadsheets or in an underperforming database, implement a solution that is made for this very purpose … inventory control.
At Fishbowl, we eat, sleep, and breath inventory control. Fishbowl is a very powerful yet easy to use Order Management, Manufacturing, and Inventory management solution. Fishbowl Inventory looks after all of your Sales Order, Purchase Order & Manufacturing Order workflow, and as a result keeps accurate inventory levels so that you can deliver in full on time & reduce stock outages.
1 – ACCURATE INFORMATION IN MEANS ACCURATE DATA OUT
Put accurate information in, get accurate information out!
This starts with information provided when you place an order with a supplier.
Accurate prices, quantities, and scheduled delivery dates need to be entered. This will allow for accurate inventory level forecasting, and also allow for cashflow forecasting.
When the items arrive at your facility you need to receive them in correctly. Don’t rely on documentation provided by the supplier, their quantities are often incorrect.
Double check this information on receiving.
The same can be said after receiving goods into your warehouse. If you discover faulty,
damaged, or lost stock you need to adjust this information immediately, don’t wait for the annual stocktake to roll around, make the changes now so you can make accurate
reordering decisions.
Correcting information along your products journey is crucial in order for you to make
educated purchasing decisions.
2 – USE GOOD SOFTWARE
Use good software to maintain live inventory levels.
Counting stock often to work out if you need to order more is time consuming.
Keeping track of inventory in an excel spreadsheet leaves a lot of room for error.
Using an inventory management software platform is the solution. Fishbowl has your inventory as the number one priority at all times. Use Fishbowl for Purchasing, stocking, Manufacturing, and Selling your inventory. At all touch points along the journey of your products lifespan, Fishbowl keeps your inventory accurate.
Keep track of stock in multiple locations in a single system, and use the incredible
forecasting, Min-Max, lead time, and purchasing functions of Fishbowl to make informed decisions about what to buy, how often to buy, and how much to buy.
Implement barcode scanning in your warehouse. Fishbowl Go is an app design to be used on handheld scanning unit or on your smartphone. Increase your accuracy and efficiency with Fishbowl Go’s live data scanning function. Scan in the items as they arrive, and put them away into the inventory location where these goods will live. Scan during stocktakes, scan to pick orders. Every scan is making your inventory more accurate by removing human error.
Keeping track of all of this on paper, or in excel, or manually is not the answer.
Implement smart technology today.
3 – PLAN FOR YOUR DEMAND
Know your current demand, forecast for future demand, and plan accordingly.
Keep track of your sales per item, per month, and learn when your demand peaks and dips per product. This analysis needs to be done on a regular basis as sales vary and this information will need to be adjusted accordingly. To do this manually could be a tedious task, so you should work smarter not harder.
Have a solution like Fishbowl produce your sales history reports for you, and map out your busy and quiet times of the year for every product you sell.
Factor in growth, consider seasonal demand trends, and plan for safety stock levels to give you a buffer.
4 – SUPPLIER LEAD TIMES
Know your supplier lead times, and how often you should reorder from them.
Is your supplier just down the road, or are they on the other side of the World?
How quickly can they produce the goods?
These are important questions that you need to plan for. Supplier delivery times can be a key consideration when deciding which supplier to order goods from. Maybe you can buy the same item from multiple suppliers, and you decide who to order from based on price, or availability, or lead time.
During receiving, your suppliers performance is being measured. Fishbowl keeps track of your supplier’s performance by measuring their lead time (date of placing order, to the date of receiving the order), the landed cost of the items, and also how much of the order they fulfill in terms of quantities. This information is critical as you can make decisions such as which supplier to order with next time, which supplier has the best priced goods once freight and other costs are included, and how long they are going to take to deliver the goods.
5 – KNOW YOUR CAPACITY
Know your capacity restraints, don’t over order.
Have you had your warehouse manager tell you to “just order more”?
Over ordering more is not the answer as this put pressure on your cashflow and often puts pressure on you shelf space in the warehouse. If you order in bulk, are you tying up capital in stock unnecessarily? … Will it fit in your warehouse?
Don’t get sucked in to ordering more, just order smarter, and improve your stockturn.
Use the forecasting abilities of the “Auto Reorder Points” calculator in Fishbowl to make sure you are ordering often enough throughout the year, ordering the correct amount of stock each time, and forecasting for any peaks or troughs in demand due to busy or quiet times.
What is the “Auto Reorder Point Calculator”?
The above factors are taken into account with Fishbowl’s built in “Auto Reorder Points”
calculator. Let Fishbowl scan for sales history and automatically tell you what your Reorder Point should be.
How are these Reorder Points calculated?
The Reorder Point Calculator uses the following information to set your stock ordering
points:
ROP = (Lead Time + Safety Stock + Basic Stock) * Unit Sales Per Day
Lead Time = The number of days between Issuing a PO and receiving it.
Safety Stock = The number of days of stock to cover emergency situations from your vendors.
Basic Stock = The number of days of inventory you want to keep on hand.
Unit Sales Per Day = This value will be calculated on a per part basis over the date range specified.
Fishbowl offers two flagship offerings which are “Fishbowl Manufacturing”, and “Fishbowl Warehouse”. Fishbowl Inventory performs inventory management tasks such as barcoding, serial number and batch tracking, advanced bill of materials and work orders. Fishbowl also has seamless accounting integrations with Intuit QuickBooks Online, Xero, and Reckon Accounts. Integrations of this nature extend Fishbowl’s capabilities by enabling real-time inventory and accounting reporting while increasing data accuracy.
Fishbowl Inventory is adaptable, easy-to-learn and is tailored to suit the unique needs of each business. Above all, we are real people who care about your business. We implement Fishbowl onsite in your business, and we’re always available on the phone whenever you need us.
Are stock outages afecting your customers and your business?
Let us help you make this a thing of the past and implement these proven solutions for your business.
1300 785 755 (AU) or 0800 785 755 (NZ)
solutions@fishbowlinventory.com.au
www.www.fishbowlinventory.com.au