Poor inventory management can affect businesses in various ways from increased cost, inefficiency, and losing market share to financial troubles. Here’s how:
Higher Storage Costs: Over-stocking inventory can lead to a more visible and immediate impact — higher inventory holding costs.
Spoil Perishable Items: Products such as fish & food with limited shelf life may risk expiration, spoiling, and deterioration, leading to lost revenues, and increased disposal costs.
Negative Brand Image: When you don’t have sufficient stock of inventory to meet customer needs, you let them down and they turn to your competitors.
Cash Flow Issues: Increased inventory costs lead to less availability of working capital. In short, the business doesn’t have enough capital to keep up its regular activities.
Less Agility: Poor inventory management makes it difficult for businesses to prepare themselves for sudden demand fluctuations & market trends.