You’ve probably heard stories of the “Oprah effect,” wherein an appearance on The Oprah Winfrey Show and/or an endorsement by Oprah Winfrey herself can create an enormous business impact.
The onslaught of new orders triggered by something like the Oprah effect can be a make-or-break point for a business. By weathering the storm and shipping all orders on time to all your new customers, you set your business up for huge success.
On the other hand, if you flounder because your inventory management process isn’t effective enough to handle this boom in business, you’ll be left to wonder what you could have done better.
When it’s time for your business to grow, you need to be prepared. One place to start is in the warehouse by ensuring you’re following inventory management best practices.
Without effective inventory management processes in place, a sudden boom in business may become an unforeseen burden. If you can’t process orders in a timely manner, you’re not going to have happy customers.
If you see any of the following warning signs, it’s time to reconsider what you’re doing in the warehouse.
Warning Sign: Customer Order Fulfillment Is A Challenge
Many “Oprah effect” stories recount new businesses — artisan caramel makers or chic baby apparel specialists, for example — becoming completely overwhelmed by orders.
It’s one thing if you’re just starting out and see a surge of business; a young company might not ever be prepared for the volume generated by an “Oprah effect.” But if you have an established business and regularly struggle to maintain inventory or ship orders on time, it suggests that you have a larger problem on your hands.
If you don’t have good forecasting tools and inventory management software in place, you’re handicapped from predicting peaks in business and seasonal trends. Being able to accurately anticipate customer demand is critical, especially if you’re in the business of selling a physical product. If you don’t have it in stock and ready to ship in a timely manner, people will turn to another vendor, if at all possible.
Warning Sign: Too Many People Are Involved In A Simple Process
In the past, just shipping a product may have required many people. With all of the automation technology available today, fewer people are needed for many processes.
Modern barcoding technology, for example, allows employees to scan items into and out of inventory without manually tracking product and relying on someone else to eventually enter this data into your system.
These delays might not seem significant in isolation, but they compound into a larger issue, especially if you’re processing thousands of orders a day. It’s best to have as few people as possible touching a product before it gets out the door.
Warning Sign: Your Warehouse Is Poorly Managed
Good warehouse management is essential for long-term business success. A poorly managed warehouse slows your ability to move product. Every bin in your warehouse should store a specific product to allow for fast, efficient order picking.
Keeping 15 different product SKUs in one bin makes it much harder for people to find what they need compared to just stocking one SKU in a bin.
Warning Sign: You’re Perpetually Overstocked Or Understocked
If you find yourself with too much or too little product on hand, it’s a sign that you need to reassess your inventory management process.
Regularly being out of stock or overstocked means that your inventory forecasting and tracking processes are not working. If you rely on imported goods that arrive on a container ship that must clear customs, it could take weeks to receive your product.
If you don’t have an adequate way to forecast your demand against the speed of the supply chain, you’re going to wind up with problems.
If you’re seeing any of these warning signs in your warehouse, you should consider making a change. Automation software and sophisticated ERP add-on tools can help make even the most complicated inventory more manageable.
Admiral Consulting Group specializes in helping businesses find and implement software solutions for running a more efficient and effective business. Talk to an Admiral consultant today for free and learn about technology solutions designed to improve your bottom line.