In his book, The Guide to Inventory Management , Jon explains how inventory is usually a distributor's largest asset. However, many distributors don't take advantage of the cash flow opportunities that inventory turnover can generate for a business. The list some possible problems that managers can have with inventory. Let us see if we can't come up with some ideas to rectify these problems in general. First off, if the wrong quantities of the wrong items are being found on the shelves, then the question of back stock and inventory control aren't being handled properly.
Materials have to be available at the time the customer requests it.
When surplus inventories arise, it still can't benefit the customer if the timing isn't right. One solution to this problem might be to run weekly checks, or daily if necessary on the inventory itself, and to maintain minimum levels at all times if necessary. This is where the work in process and finished goods have to be accounted for and recorded so managers can know what they've got. The next problem, that of computer inventory records not being accurate, is common even in big businesses where some large computer system says one thing, yet the actual, physical count inside the warehouse gives you some different numbers. This can be caused by paper float, or the lost time between when the actual receipt and release of the inventory happened and was recorded.