At many of the warehouses and inventory stores, there is a common issue about the social status of the shelves. At one end, you will see a shelf that is enjoying prosperity with a high status. You can see big chunks of products that are relaxing there on the shelf from weeks. They are having their lazy days with a silky layer of dust. Even the stock balance sheet of your CRM has a damn high status for them with some big figures.
On the other hand, you see a shelve of a deprived class of shelve that constantly stays empty. There are high selling products that mark their spot on the shelves but misses the fortune to enjoy the luxury like the above ones. They arrive and in a short while, they have to leave the spot. And in your Microsoft Dynamics Inventory Management stock balance sheet, they constantly run with scarcity and have a low status.
The Misery of Overstock and Understock
- Stock imbalance cost retailers $60 billion in 2015. (Forbes)
- With careful inventory management, retailers can increase profits even by 50 percent. (CNBC)
- In 2017, inventory stock imbalance cost retailers nearly $100 billion globally. (Tyco Retail Solution)
- Retailers lose $1.75 trillion every year because of out-of-stocks, overstocks and returns. (Entrepreneur) View Source
The social cliff mentioned above is commonly known as understock and overstock. It is the imbalance of the inventory which ignores the input and output demands on your warehouse. Hence, you end up loading a big stock that has very less movement. On the other hand, you have a range of fast moving products and constantly stays out of stock because of their selling pace.
So, you are loading unnecessary stock and the stock that is necessary for your inventory, it falls short. This misery of overstock and understock leads your inventory to suffer losses. Even if you try to load your fast moving products as per its demand, you might face issues in finding that extra space. Thus, all this end up resulting damage to your business growth. Now the question here is, why does it happen and how?
How Do Overstocking and Understocking Happen?
You might have your inventory management streamlined with your Dynamics CRM yet, it is unable to bring efficiency. Let’s look into some probable reasons which you might relate with:
Outdated Tools and Process
If you use outdated tools or have limited features in your Microsoft Inventory Management Software, it might result in one of the two. You might have installed the system years back and did not pay any attention to update it. Such outdated systems also fail to manage your inventory in a well-defined manner. When your existing system is unable to notify you when your stock goes down, you might suffer such inventory cliffs.
Inventory Complexity
You have several levels to manage in an inventory to manage. From store level management to inventory distribution, your employees have to look after every single thing. This makes your inventory management system complex. Here it becomes difficult to manage your inventory and keep a track of all the products.
System Disconnects
According to Retail Wire, one of the top five most common reasons for overstocking are data disconnect. When your inventory management is unable to sync and integrate with the entire system it fails to tell you where you are storing short or going high.
Lack of Insights
Analytics are crucial in inventory management. There is an intense need for you to understand the demand and supply of your inventory. This will help you to stock as much as you have the demand for. Weekly, Monthly and Quarterly reports will help you to scrutinize you warehouse capacity. When you don’t have any analytical data in your hands, it makes you suffer with over the limit stocks.
How Can You Cope with Overstocking and Understocking?
It might seem a bit tough for you to overcome the challenges of overstocking and understocking. But it is not that tough too. A well-defined inventory management extension for Dynamics can be a help to get over this imbalance of inventory. AppJetty offers you a Microsoft Dynamics Inventory Management Software extension that has all the features to help you to maintain equal stock in all your shelves.
Let us talk about some of the core features of this tool. It will help you to manage your inventory in a better way and coup with the hurdle of overstock and understock inventory. These top features are:
- Low Stock Management
Whenever your stock goes down to a certain amount, the Dynamics CRM Inventory Manager sends you an alert. This will notify you that certain products are about to get out of stock. So, you will be able to place new orders and will never run with no stock status. All you have to do is set parameters and add values on what amount, you need refills. It will also place the order whenever you are about to run out of stock.
- Inventory Reports
In an inventory management system, periodic reports and analytics are utmost important. You will have to know which are your best selling products and which are not performing at all. AppJetty tool generates inventory reports and analytics charts. This will help you to know on which products you will have to focus more and save them from getting out of stock or overstocked. So, you will not miss out any update and will keep your inventory as per your needs.
- Manage Warehouse and Stock
You have a serious need for an accurate inventory management system if you are facing an imbalance in your stocks. AppJetty inventory management tool helps you to resolve such inventory issues and provide you exact figures. This way, you never have to face any mismanagement in your inventory stocks.
So, break the ice for your non-selling products and break the luxury of their shelves. AppJetty’s Microsoft Inventory Management Software will aid you best. It will not only prevent you from loading excessive or falling short of products but also will help you to streamline your sales.
If you want to know more about this tool or how it will overcome your overstocking and understocking issues, feel free to ask. We will be happy to help you!
