Time is money. Inventory is time and money. And time and money are not to be wasted in the world of distribution and warehousing. What many organizations fail to realize is that there are many hidden costs associated with inventory that aren’t written on the General Ledger as the stock itself.
Following are some of the hidden costs of inventory:
- Filing stock documentation and moving items within the warehouse—employees working on this are not contributing to your profitability.
- Misplaced and redundant items—staff not made responsible for inventory can misplace and then reorder stock that you already have.
- Counting and tracking of inventory—the more you have, the longer it takes to tally.
- Investment opportunity missed with cash tied into inventory holdings—if your company’s cash is tied up in inventory, then you can’t invest elsewhere.
- Inventory inaccuracy—if you can’t find the items, then they may as well not exist.
- Rent, utilities, insurance, and taxes on warehouse and inventory—all much higher if you carry more inventory.
Microsoft Dyanmics GP, a comprehensive Enterprise Resource Planning (ERP) solution, can streamline and optimize your inventory and warehousing processes. With increased efficiency, productivity, and transformative 360° business oversight, your organization, when powered by Microsoft Dynamics GP, can make squandered time and money a thing of the past.
By Karen Riordan of SSi Consulting, a
