How Can Digitalising Your Business Boost Profitability During and Beyond a Crisis?

Simplistic data processing tools

To run a successful business it is vital that the inventory is managed carefully. Even seemingly small inventory management decisions can have a profound and far-reaching impact across the rest of the organisation. For a company to succeed, the inventory strategy must align with the overall corporate vision of the organisation.

Surprisingly, companies are highly reliant on simplistic data processing tools to manage their inventory. The inefficiency of ordering with a simple spreadsheet is costing money through excess and obsolete inventory missed sales, and wasted time. All of these can cause problems to the bottom line which directly affects profit and loss.

In our field, Excel spreadsheets are often the default tool for every bit of analysis required. However, trying to manage inventory this way can quickly become a complex and long-winded exercise. In a situation where demand or supply can quickly change or where transfers between locations need to be suggested based on certain business rules, an Excel sheet will not be sufficiently responsive to support these processes. After all, how can company processes remain sustainable if the spreadsheets in question have to be partially re-invented every time a change occurs?

Furthermore, a spreadsheet is only as accurate as of the person who created it. What happens when this person changes roles or leaves the company? Will their replacement be able to decipher the cryptic formulas which have been developed over the years? The reality of Excel spreadsheets is that every sheet becomes bespoke and companies become dependent on whoever created the document. Besides that, wouldn’t it be nice if the business can capture the knowledge of its talented employees and integrate that into the inventory processes?

Invest in an inventory management solution

Investing in new software can be a huge leap of faith for some companies. There are some known risks associated with purchasing and implementing software such as overpromising functionalities and underestimating implementation times and costs. Hence, choosing a vendor you can trust matters.

Reviewing a testimonial or directly hearing from existing customers in similar business is a good way to validate the claims of the vendor. The first-hand experience and proven results will give more confidence in the capabilities of the solution and the ease of use, as well as the expertise of the vendor and willingness to support during and especially after the implementation.

Although advancing technology has helped make remote access to networks less cumbersome, the benefits of working with a local vendor remain as important as ever for project teams. The greatest value of a local vendor is the face-to-face personalised attention that can be provided. Topic-experts can come to the office and even peak in the warehouse and spend as much time as it takes to learn about the requirements of the business, evaluate the existing resources and take planned next steps to ensure the success of the implementation.

Partner with a trusted vendor

Investing in new software can be a huge leap of faith for some companies. There are some known risks associated with purchasing and implementing software such as overpromising functionalities and underestimating implementation times and costs. Hence, choosing a vendor you can trust matters.

Reviewing a testimonial or directly hearing from existing customers in similar business is a good way to validate the claims of the vendor. The first-hand experience and proven results will give more confidence in the capabilities of the solution and the ease of use, as well as the expertise of the vendor and willingness to support during and especially after the implementation.

Although advancing technology has helped make remote access to networks less cumbersome, the benefits of working with a local vendor remain as important as ever for project teams. The greatest value of a local vendor is the face-to-face personalised attention that can be provided. Topic-experts can come to the office and even peak in the warehouse and spend as much time as it takes to learn about the requirements of the business, evaluate the existing resources and take planned next steps to ensure the success of the implementation.

Consider return of investment

When assessing whether or not to invest in a solution, it can be tempting to focus on the total cost of ownership (TCO). However, the TCO will analyse the cost perspective of the investment. When investing in solutions to optimise inventory, the emphasis should be more on benefits. After all, that is the main reason to digitalise the business.

Return on investment (ROI) is, therefore, a better financial metric to utilise. This is because of ROI factors in potential value and expected return. For example ROI Factors in the long-term potential value of translating the strategy of the organisation into more effective operational decisions. Furthermore, ROI analysis can begin to quantify intangible benefits such as capturing and maintaining knowledge within the company.

Conclusion

With the ability to reduce cost and that way increase profit, digitalisation is the answer to many inventory management pain points.

By supporting the current supply chain processes and strategy, a good inventory management solution will invariably heighten efficiency and makes life easier for everyone involved in the company. The right solution will make it easily possible to strike the right balance between working capital, operational costs and the optimal service level to customers, which will ultimately result in a more profitable business.

Also shared on supplychainasia