Managing inventory accurately within your service business presents several challenges. Many technicians and installers view inventory as an unnecessary task and fail to grasp its importance. It’s essential to train employees and hold them accountable for the materials and products on their service vans and trucks. Conducting inventory checks weekly, or at the very least monthly, can alleviate the stress of accounting for everything when done annually.
The issue isn’t confined to the workers; managers and owners are equally culpable. Everyone is busy trying to service their customers and often feels they don’t have time to maintain accurate inventory. I’ve personally witnessed installers and technicians going to local hardware stores to pick up supplies. This practice presents two problems: it takes time away from the project and materials cost more at these stores compared to commercial suppliers. When you consider the lost production time and higher costs, the importance of inventory becomes clearer.
I have seen firsthand how not maintaining strict inventory control can cost a company money. For instance, a top manager once grabbed equipment from inventory, threw it into their truck, and never recorded it for invoicing. By the end of the year, there were two unaccounted items of the same product. This situation could have been avoided by following established procedures, but the manager was too busy to create a sales order.
I recommend that companies with multiple service or installation vehicles create inventory zones. This approach allows for tracking what is on each vehicle and in the warehouse, making each technician responsible for their product and simplifying product location. There may be an item on one vehicle that is needed elsewhere. Additionally, recording the serial numbers of each piece of equipment is crucial for future reference and warranty purposes.
Obsolete stock also consumes valuable warehouse space. Periodically reviewing stock levels and selling off obsolete items at discounted rates can free up space and recover some costs.
Improved inventory management brings numerous benefits. By not tying up money in excess inventory, you can free up cash for other business needs. Efficient inventory management reduces the time wasted searching for items, thus improving overall productivity. Accurate inventory ensures the timely delivery of products and services, which enhances customer satisfaction. Avoiding overstock and stockouts helps save on storage and emergency procurement costs. Finally, accurate inventory data enables better forecasting and planning, leading to more informed business decisions.
