There is a general concept that we have heard over times that if the supply increases the demand too increase automatically and vice versa. But, if the supply is not enough to fulfill your customers’ needs, it can directly impact the credibility of the business. How? Today’s market is customer sensitive so it becomes extremely important to fulfil your customers’ needs in real time. Shoppers often feel let down when you don’t have what they’re looking for, and that really disappoint customers. Keeping inventory too low can result in lost sales which will lead to a stockout. Therefore, it becomes highly critical to minimize the impact related to stockouts and keep your customers happy.
Let’s discuss in this article as what impact as the stock out situations can create in your business and how best erp software can help.
Drop in revenue
It’s a general phenomenon that you may lose out the major revenue if you are not avoiding the understock or overstock situation. Once customers perceive unavailability at most of the times, they will look for some other option very easily. Therefore, it becomes extremely important to keep the minimum quantity of the product so that you face no major losses and your customers always stick to your brand.
Impact the Goodwill
It takes years to build the brand image so it becomes really important to keep that goodwill intact for years to come. If your business is doing pretty good, you must ensure that you watch each little step to ensure the goodwill is not hindered with any understock or out of stock situations. You may not want to lose the brand image just because of inventory stock out.
Handling all the processes manually is time-consuming, tedious, and expensive tasks. For example, due to inventory stock outs, managers are focusing on repairing the situation instead of investing their time planning strategies for the betterment of the business. With planned strategies and good ERP system in line, certain tasks can be automated, which can lead to better utilization of time in other parts of the business.
Deploy an ERP that can automate inventory processes
Handling all the processes manually takes time and is error-prone replete with miscalculations and tedious tasks. In inventory stock-out situations, managers are focused more on repairing the situation instead of investing their time and energy in planning strategies. With a robust and enterprise-ready ERP in place, certain tasks can be automated. This also facilitates batch tracking, lot tracking and help you to manage thousands of SKUs in real time. So, the automation plays a critical in boosting productivity which was earlier getting hampered by manual processes.
There are more downsides of not using an ERP system in place such as hidden costs, brand image is on stake, loss of market competitiveness, loss of customers and time. This proves that stockouts are extremely expensive and must be fixed soon. With an automated solution in place, you can mitigate all these costs related to under stock or stockouts. No customer wants to hear, “Sorry, we are out of stock” so it makes sense to pay due diligence on inventory counting and do a replenishment planning strategically.