Stop and Take Stock! The Unglamorous Importance of Inventory Management
Whether you run a pub or a shop, on wheels or on coffee, tracking finances and inventory are probably the least glamorous part of the job. Unfortunately, stock management must also be one of your top priorities. Done right, it’s the difference between your business being tip-top or a laughing stock. We quickly tackle the most common problems that make inventories such a headache so dig out that chewed pencil and let’s begin!
PROBLEM 1: Wrong Stock
Not knowing your clientele, best-sellers or your times can be fatal. Running out of lager at half time means disappointed customers, bad reviews and financial losses.
Stocking products in incorrect proportions also causes problems - a gin bar with 100 bottles of tonic but half an ounce of gin left leaves a bitter taste.
Traditional Solution: manual bookkeeping, complex EOQ (economic order quantity) calculations, experienced staff, trial and error, consistent customer headcounts, hoping for the best.
PROBLEM 2: Wrong Quantities
We hate to break this to you but having too much of a good thing, can be a bad thing. It’s always useful to keep some products in stock in case of production issues but overstocking is a problem …boxes creep into the service area and you get used to the sound of loud bangs followed by, “I’m okay!” from the stockroom. Aside from the health and safety issues, too much stock pushes your insurance and storage costs up and ties up your capital. You run the risk of certain products falling out of fashion or out of date before you have the chance to convert them to cash.
Traditional Solution: Blocking off days on the rota, shutting the doors, breaking your staffing budget by drafting everyone in to complete a mammoth counting exercise.
PROBLEM 3: Wrong Timing
You open your new premises with a perfect stock that took you months to decide on, order in and set up… but slowly, surely, your stock levels develop a leak – 3 pairs of shoes, 2 irritated customers, 1 red-faced shop assistant and 0 shoes in the back. You had decided to place your orders only once a month but suddenly you need an emergency shoe order from your supplier… whose van has broken down.
Traditional Solution: Keep in touch with various suppliers, pay premiums for emergency deliveries and setting up accounts with an alternative supplier if let down by the usual supplier, rely on favours, apologise and offer discounts.
MODERN SOLUTION: intelligent stock management system
Traditional stock-keeping is a painful and exhausting task – many businesses slowly get their books into such a mess that they eventually hire an accountant. Time-consuming and expensive.
Now, even the traditional “old man pubs” understand the benefit of using an electronic stock-management systems to take on the traditional task, and then add value. Particularly useful features include:
- Minimum Stock alerts - automatically re-orders stock.
- Stock Review – automatically returns stocks to a predetermined level.
- Supplier lists - avoid being let down by an individual supplier.
- Sales Reports – run a report at any time to determine the quantities of individual products still in stock, identify best sellers and calculate overall profits and losses.
New, intelligent systems integrate with your till to create an efficient stock flow with an emphasis on less hassle and more sales. It’s 2016, time to step away from the spreadsheets.