By Brad Martin, Nexstar Network Business Coach
What does inventory management have to do with improved business? Some of the most common issues general managers or owners face when dealing with inventory management are:
- Theft Detection
- Controlling direct material costs
- Controlling Cash
So, how do you tackle these issues? First you need to ask yourself, what’s your level of tolerance? You assess this, you need to have a firm handle on your total inventory.
Your total inventory = Your total inventory in your trucks + Your total inventory in your warehouse
Next, you’ll need to determine how much inventory is actually needed? You should only have as much as to operate the daily business. Keep in mind, there is a cost to having insufficient inventory. These costs can be significant. You have to keep it in balance. You don’t want to have too much, but you need to make sure you have the parts that your technicians need when they are on calls. When you have an accurate assessment of your total inventory, you can then determine your level of tolerance for shrinkage, loss, theft detection, controlling costs and controlling cash. Making decisions based on facts, rather than assumptions is a key component for managing a successful contracting business.