Why It Is Crucial to Track Your Company’s Inventory ProperlyOctober 25, 2023
Inventory lies at the heart of every business. However, very few use appropriate strategies to properly manage and track their inventory.
According to research, 43% of small businesses don’t have an active inventory monitoring strategy. This leaves them vulnerable to several inventory challenges, such as understocking, overstocking, and inventory losses.
For field service businesses, tracking inventory allows you to account for who has your business’s assets, tools, and equipment, how many are available to service work orders, and when you should restock particular equipment based on seasonal job demands and other factors.
Here’s a look into inventory tracking and how your home service business can implement the right strategy.
Inventory Tracking and Management is a Necessity
Field service businesses need to invest in an inventory tracking and management system to keep track of all inventory and avoid wastage, stockouts, and inefficient procurement processes.
With concise inventory tracking, you can make crucial and informed decisions about purchasing new stock, renewing software licenses and subscriptions, and managing existing supplies to ensure your service delivery is not hampered when customers need it the most.
An efficient inventory tracking and management system helps you identify the most needed tools, assets, and equipment and helps you prioritize which ones need to be restocked. You also get to optimize your warehouse or storage space and keep tabs on what’s going in and out of storage.
Proper inventory tracking also helps ensure that your crew stores tools, equipment, and other assets appropriately, minimizing the risk of damage due to poor storage and handling.
Invest in a Data-Driven Approach
Modern field service businesses should invest in a data-driven inventory tracking and management system that offers better and more accurate insight into inventory.
Data-driven inventory tracking and management help improve forecasting, making it easier and more accurate for your business to stock up on more equipment needed for seasonal work order demands.
According to research, businesses that have invested in data-driven inventory management have achieved a 90% accuracy in demand forecasting compared to 60% for manual forecasting.
Common Inventory Tracking Challenges You Want to Avoid
Several inventory tracking challenges affect most businesses. Here are the most common ones.
Lack of Scaling Opportunity
Inventory tracking is easy when the small business has a few work orders to fulfill. However, as you begin to scale, more challenges crop up, such as a lack of space to fit in new equipment, tools, and assets and more time to retrieve inventory.
Moreover, you have more items to track, each with unique traits such as size, material, and color, making mixing items and losing some equipment easier.
Moving & Misplaced Inventory
Your crew never sits still. Typically, crews in-home service businesses are always on the road, fulfilling work orders at various job sites. This means inventory is also moving, making it harder to track equipment, tools, and assets and know who’s using what and how much is left for the next work order.
Poor Time Management
Inventory tracking and management is very time-consuming. This can come at a high opportunity cost for your business, with office admins and crews taking a lot of time tracking inventory for your business instead of handling customer calls, invoices, payments, work orders, and other crucial work.
Tracking Inventory Simplifies Business Operations
Proper inventory tracking has a lot of benefits for your business. Here are the top ones.
Easily Account for Your Business Property
With proper inventory tracking, your business can always know where its most valuable equipment, tools, and assets are at any given moment. For instance, you can use inventory management software to record the location of all assets, catalog them, and track them as they move.
This allows you to spread your inventory to multiple locations while tracking them effectively and ensuring your services are more optimized.
Quickly Identify Inventory Losses
Keeping good track of inventory allows you to identify losses or thefts and address them before they escalate. For instance, mishandling equipment at a particular location may cause damage and losses, which you can address promptly by improving the storage facility or taking other relevant measures.
You’ll also avoid theft and misplacement since you know who in your crew has what, when, where, and in what condition it’s in.
Improve Customer Satisfaction
Since you always have your equipment, assets, and tools in stock, customer service by your field service business will improve. You’ll be able to fulfill work orders faster and increase customer satisfaction, consequently increasing revenue.
Advance Business Operations
Accurate inventory tracking provides valuable insights into a company’s sales and revenue, allowing owners and decision-makers to make better calls regarding inventory management and service delivery.
For instance, you can understand how your crew uses various equipment and tools to service work orders and find areas to improve efficiency and throughput.
With an inventory app installed on your crew’s smartphones, you can have everyone actively participate in inventory tracking, making the process easier for everyone to follow and abide by.
Moreover, you can forecast future demand better and prepare for seasonal fluctuations in specific service requests.
Invest in the Right Inventory Tracking Tools
Proper inventory tracking and management will save your business a ton of resources and allow you to improve your operations and offer better customer service. Invest in the right technology and have everyone in your home service business keep track of its assets better.
Ralph P. Sita, Jr., CPA – Is a lifetime successful serial entrepreneur. He is the Co-Founder of FieldBin, a home service management software designed for trade business owners. While in high school and college Ralph worked for his father’s HVAC company as a mechanic’s helper and then ran a few jobs with his brother Tommy. At even a younger age he would help his dad calibrate thermostats and polish old copper and brass fittings…nothing was ever wasted! In addition to FieldBin, Ralph Co-Founded Cybrary and serves as both CEO and Co-Founder of TrainACE and GamePlannerPro.com.