“My inventory is missing, but I hear you’re the guy that can help!”
The caller was the frazzled owner of a business that had a constant flow of inventory both in and out of its warehouses.
The missing inventory was the lifeblood of this organization, and being unable to keep track of it was expensive and time-wasting.
We’ve been discussing Perceived Problems (what we think is wrong) versus Actual Problems (what is actually wrong).
Our client had a very real perceived problem! No business can maintain its bottom line if its processes are in chaos, much less improve it! Knowing exactly where your inventory is, where it’s been, and where it’s going next is crucial for success.
I imagine there were some other pain points this business was experiencing: customer dissatisfaction, employee frustration, and decreasing revenue!
So why couldn’t the business keep track of its inventory? The reason was rather simple. They recently upgraded their system to new software designed to improve their processes. Cataloging the movements of inventory would now be much easier than before.
Except, it wasn’t! Instead of improving the business, the new system brought more chaos than ever before! There were two factors the company overlooked:
- The company did not have a clearly defined process for when and where to document inventory movements. There was no consistent point in the process that employees could identify as being when the documentation should occur. They would maybe note it when they delivered the inventory to the customer, maybe when they picked it up, or maybe not at all.
- Employees are not sufficiently trained to use the new system software. As a result, they had to make a choice between keeping the inventory flowing and the business going without good documentation, or not allowing customers to have access to the inventory until someone could figure it out. They chose to keep the missing inventory available to customers, but without cohesive documentation.
Net result: Missing inventory!
Happily, we are the guys that can help!
Effective Performance Strategies reviewed the business processes and made the following recommendations:
- Establish specific points where inventory movements are documented. For this company, this means that all inventory must be scanned as it enters and exits the warehouse. Well-defined points in the process help employees remember what they are doing.
- Immediately train all employees on how to use the new scanning software. It takes time, but not training them takes MORE time!
Companies are always looking to improve metrics and one way to do this is to use the latest software available. Often, though, they don’t take the time to adequately train employees on how to use the software effectively. Employees don’t understand why they are documenting activities, or how the steps they take contribute to the overall flow of the business.
This company needed to align its employees to the process and the process to the employees!
Once you get all of your employees and systems moving in the same direction, following the same workflow, and consistently documenting the process, your company will be ready to soar!
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