HOW TO PREVENT FROM AND DEAL WITH DUMMY INVENTORY?

Inventory is always a core issue to any Enterprise. In fact, it is usually difficult to perform an inventory of goods in the warehouse without any error or difference between actual figures and records. So, what is the cause of imaginary inventory? How to prevent from and deal with imaginary inventory effectively? Refer to our article below for more information on inventory.

1. Causes for Imaginary Inventory

Firstly, imaginary inventory may be a result of subjective reasons: storekeepers often estimate and perform a poor inventory of stock level while the delivery of goods from and to warehouses is loosely controlled, and more importantly, the system is not accurately updated for stock-in, stock-out, and return of the goods, which usually results in a lot of differences in inventory data.

Secondly, imaginary inventory may be a result of objective causes: Processes are not systematized between stock-in and stock-out; arising transactions are not timely updated in the system.

2. Existing Difficulties That Cause High Imaginary Inventory Level

Distributors’ failure to control their inventory levels effectively: normally, distributors will have to estimate the volume of stock items, and then notify enterprises of inventory level. But, manufacturing enterprises are unable to make accurate statistics of distributors’ stock level and market conditions, and they easily make erroneous production decisions.

Lack of an inventory control process: systematizing the inventory control process is a relatively important task. Stock-in and stock-out deliveries are often accompanied with documents, some of which may be lost or inconsistent with each others due to the fact that deliveries to and from warehouses are not updated in the system, but only notified among storekeepers. Thus, there are usually some inaccuracies or inconsistencies between system data and actual numbers.

The problem of “cooking data”: when salespersons are active in the market, they will collect data on market conditions, demands, coverage, competitors, and even customers, etc. However, their data contains many inaccuracies while the administrators have no tool to control the accuracy of market and product data.

3. The Answer To Imaginary Inventory Problem

There are currently many solutions for Enterprises, but with the outbreak of Information Technology, the application of technological solutions to production and business management has become popular among Enterprises. Application of digital technology and cloud computing system, DMS Solution – distribution system management solution  (eSales Cloud DMS) will be the “answer” to inventory problem.

Our distribution system management solution will help enterprises systematize the whole sales and production processes, provide closely-designed processes and functions and effective user support in the system that will enable Enterprises to obtain a complete and “real” DMS dataset on the market, points of sale, lines of sale, inventory, sell-in, sell-out, promotion, product display, POSM, etc.; prevent from and minimize the problem of cooking sales data.

The solution will provide Enterprises with features to systematize the inventory management process, including Stock-in, Stock-out, Stock Transfer, Stock Adjustment, and Stock Inventory. This process will be continuously updated and data will be automatically adjusted in a quick and accurate manner.

Based on accurate and quick data, the administrators will have the most comprehensive and accurate view of stock level in the system, as well as the ability to control distributors’ stock levels and formulate the most reasonable production and distribution strategies. This is intended to maintain the supply and demand at a balanced state.

High imaginary inventory is currently a serious problem to Enterprises; therefore, it is an urgent task to strengthen and invest more efforts in the management and control over this matter. Please refer to our eSales Cloud DMS solution for inventory management system for the best option to effectively manage and develop your company.