Inventory Management Programs and Service Companies
I once consulted for a medium-sized service company that did not have an inventory management program in place. When asked how they tracked supplies from supplier to customer, the answer I received was one that I have heard many times in the years I have been in this industry.
They stated that each vehicle was to maintain a certain amount of stock; the proverbial warehouse on wheels. When an item is used, it is charged to the project and the vehicle was restocked weekly. When questioned how they managed excess inventory or broken or "misplaced" items, the company felt that the markup on each item was sufficient to offset these costs.
To to recap, this company was satisfied with lowering their profit ratio to atone for overstock or supplies that ended up in the trash. This company had fourteen service vehicles and eight installation vehicles. Let's do the math. We will use this company's historical figures for stocking each vehicle, calculate an average (mean) and round those numbers by nearest hundred. We can then estimate that each service vehicle holds about $4,200 in stocked items and company tools and each installation vehicle houses about $6,400 in stocked supplies and tools. That would be $110,000 in total vehicle inventory.
This is not a significant amount of money for a company that generates millions per year in revenues, but this figure does not include unused, overstocked or warehoused supplies. You may be thinking that if each vehicle maintains a certain amount of inventory, where does the overstock notion come from?
The concept of a stock/restock program is not an exact science. The same holds true when it comes to each employee managing the supplies for their vehicle. Each technician and mechanic in a service company has their own ideas in what supplies they need to complete a project. This comes from previous work experiences.
Even if the company provides a strict list of what supplies that need to be on each vehicle, the overstock of certain items seems to find their way on each individual vehicle. When I was a manager, I once inventoried a service vehicle with over three hundred, 3/4 inch, PVC fittings. That tech was determined not to run out of fittings!
Back to this company. After a manual inventory was performed on their vehicles and warehouse, and a cost analysis was calculated, they had $63,800 in overstocked supplies and tools. Add this to the base vehicle inventory costs of $110,000, they were managing $173,800 in total inventory.
With a customized inventory management program, they reduced their inventory by 28% in the first year and kept it at a manageable and cost-effective rate. Their program also assisted with making the decision on when to purchase items in bulk quantities and the buying and distribution of commonly used items. This was an added savings.
This is just an example. Each company is structured differently. Inventory management programs are not just for inventory control. It can be used for recordkeeping and forecasting the buying of supplies, price and supplier comparisons, controlling assets (i.e. tools and equipment) and so much more.
If your organization does not have an inventory management program in place, you won't realize what you could be saving. There are many software programs structured for businesses of all types and sizes. To those who say their manual program does the job, I say, "If it works...". For those who are growing (or want to), I would suggest getting on board now before your bottom line forces you to do so.
Where To Find Inventory Management Software Online
|AdvancePro:AdvancePro Technologies | Inventory Management Software for QuickBooks Users. You've got inventory. We've got your inventory management solution. With over 15 years of experience, find out why industry professionals choose AdvancePro. Book a demo today!|
|ASAP Systems:Inventory System - Asset Tracking | ASAP Systems. Optimize inventory, increase productivity, and improve traceability with a barcode inventory and asset tracking system. Get a no obligation trial today!|
|CIN7:Inventory Management Software | Cloud Inventory | Cin7 | Cin7 is Cloud Inventory Management software designed to grow your retail and wholesale businesses by connecting all aspects of your business together.|
|Clearly Inventory:Welcome to Clearly Inventory, an easy online inventory management software for small business and organizations - web based, fast, sharable, and customizable. Clearly Inventory - Online Inventory Management Software|
|Epicor Software:Inventory Management | Inventory Control Software | Epicor.com | Streamline your inventory processes with Epicor inventory management software.|
|Executivpro:Inventory management software | Manufacturing tracking system software for manufacturing, warehouses and retail business. Golden inventory system, web based SilverNet and simple Bronze system.|
|inFlow:Free Inventory Management Software - inFlow Inventory | Inventory management software to track orders, control stock, and manage your business. Use the inFlow Free Edition and start your inventory system today.|
|Inventoria:Manage Stock with Inventoria Inventory Management Software. Easily organize and track the inventory for your business for free. Set warning levels and run reports to insure that your stock is always at an optimum level.|
|Khaos Control:Stock Control Software for Complete Inventory Management | Our Inventory Management Software offers a complete stock control solution for multi channel retailers. Find out more and request a free demo today.|
|Kornyk:Inventory Software Management & Supply System Control | SIMMS | Get an inventory software management system & increase efficiency for your small to medium business. Feel the power of supply chain control. Contact us today.|
|Ordoro:Ordoro - Shipping and Inventory Management | A single ecommerce app for managing shipping, inventory, and everything in between. Access cost-effective rates, print labels, and sync your inventory.|
|TradeGecko:Inventory Management Software | TradeGecko. Powerful inventory management software for eCommerce and wholesale with Shopify, Xero, QuickBooks, Amazon, a B2B ordering platform, payments and mobile to take complete control of your business.|
|Trimble:HVAC Asset & Tool Management Solution For Contractors | Trimble MEP | Our tool management software for HVAC contractors provides your management team with real-time information on tools. Learn more & explore our solutions.|
|Unleashed:Inventory Management Software - Unleashed Software | The world's easiest inventory software for your business. Powerful inventory management solution helps your business grow.|
|VAI:Plumbing HVAC Inventory Management, Plumbing Vendor Management - VAI: Plumbing HVAC Inventory Management. Learn the features of Plumbing HVAC Inventory Management.|
|Wasp:Inventory Software & Inventory Control Systems - Wasp Barcode | Wasp Inventory Software & Systems provide small & medium-sized businesses the efficiency of large companies at prices that are affordable. End inventory write offs & inventory headaches today! |