Managing inventory sounds easier than it is. At DreamWise we provide order fulfillment services to many startups and over the years I have noticed that inventory proves to be an unexpected struggle for many of them.
Seemingly simple questions regarding how much to order, when to order, how to sync inventory in different systems, etc. can become incredibly complicated for startups who aren’t able to predict future sales growth and are on limited budgets.
However, I recently learned that small businesses aren’t alone. It turns out that inventory and supply chain management is hard for everyone. Here are some statistics to prove it:
1) 7% of small businesses that have inventory don’t track their inventory at all & 15% use pen and paper. Another 24% use a spreadsheet. Only 33% use an inventory management system (WASP Barcode, 2016).
2) One of the top ten reasons startups fail is poor inventory management (WASP Barcode, 2016).
3) Despite the fact that manufacturing and shipping are faster than ever, businesses nationwide are holding on to more inventories. The average inventory on hand for businesses of all sizes has risen 8.3% in the past 5 years. As a result, businesses keep $1.43 of inventory on hand for every $1 of sales, which means a lot of capital is tied up in inventories. (Capterra, 2015).
4) Nationwide, inventories are increasing at the same time that sales are declining. From April 2015 to April 2016 inventories for all businesses nationwide increased by 1% while sales declined by 2.9%.
So you see, businesses as a whole struggle with inventory. Sometimes, like right now, they have too much. Other times, they don’t have enough. One thing we do know is that you’re experts in supply chain management and managerial finance are well worth the investment to ensure that your inventory decisions are the best you can possibly make given all the information you currently have.
In the mean time, if you are looking for someone to keep track of your inventory, give April a call at 303-858-1025.