Does Your Inventory Work for You?

 

By: Grainger Editorial Staff

Posted: 07/25/16

 
 
 
Does Your Inventory Work for You?

Whether it's the specific inventory you need to keep your business running, e.g. medical supplies, the inventory you need to keep your facility running, such as Maintenance Repair and Operations supplies (MRO), or some combination of the two, managing it all can be time-consuming, needlessly expensive, and altogether frustrating. How much attention is paid to inventory and how well it is managed can also rank high or low in importance, depending on its perceived impact on day-to-day operations. Many businesses only decide to address the issue once it becomes obvious just how much a mismanaged inventory is impacting their bottom line. This is a common truth about a lot of business issues; if it’s not readily visible, it’s not high on the priority list. What Is Vendor-Managed Inventory?

Uncovering the problem is the first, important step. Correcting it may take time, but it’s well worth the effort. Before you decide to take this on, remember the highly individual nature of your business, and that the only appropriate inventory management system is the one that works for you. So where do you begin? Before you get started, here are some important considerations.

Identify your primary objective.

Is it to save money, get organized, or reduce loss? If it’s to save money, for example, you will want to reduce the amount you buy so you’re stocking only what you need. With this in mind, avoid any system that requires you to agree to spend levels. What happens sometimes here is a tool crib with bins overflowing with items you don’t need, while other bins sit emptied of the items you use most. This typically happens when a service provider is focused on their own sales goals, instead of helping you stay stocked with what you really need. Nailing down your primary objective first will help you narrow down some of the choices that come with putting an inventory management system in place.

Your inventory management system should help improve productivity. You want to avoid stock-outs that require staff to run out to the big-box store to buy one or two items. This is a real drain on productivity, which costs time and money, a direct hit to your bottom line. The more you can eliminate these trips, the better.

Your new system should be customizable to your needs.

Your system should be your own. You should choose the items you want to stock and when. And you should have the option to completely selfmanage, have someone else manage it for you, or somewhere in between. Some companies opt to hand over inventory management to an outside provider so employees can focus on core business operations. The opposite end of the spectrum is a completely self-managed system where you have one employee or a staff dedicated completely to the task of managing inventory stocking, purchasing and reporting. Many organizations will fall somewhere in the middle. It really just depends on the nature of your business and your goals with respect to inventory management.

A reporting device is a big help.

A system that allows you to track how much you use and how often you need it is a must. This also helps with planning and budgeting. Once you get your system down, this should help to solve a lot of other problems too, like the amount of time wasted running out to purchase items.

You're in good company.

We surveyed* 2,000 Grainger customers asking specific questions about the inventory challenges they face on a daily basis. While each business is unique with respect to how they manage inventory, our survey uncovered some common themes. For example, when asked what their biggest inventory challenges were today, nearly one third of respondents (29%) said that “knowing what we have in stock and where it’s kept” is their primary challenge. When asked to share their biggest inventory complaint, 34% responded that employees “squirrel stuff away because they’re afraid we’ll run out.” Perhaps the most significant finding was that while 75% reported having inventory management systems, most saw an opportunity for improvement, and of those, only half were confident they could find the inventory they need at any given time.

Once you make that commitment to managing your maintenance, repair, and operations (MRO) inventory, you have to start somewhere. Probably the best advice we can offer is first just get started, and start small. Give your system a test drive in one specific location, for example, the restrooms. Once you see how your system works, you can expand it to other areas of your facility.

Learn more about Keepstock® — A Grainger Inventory Management Solution.

 

 

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