How Can I Implement an Inventory Tracking System?
By Brad Sugars Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
My father owns a small retail hardware store, but there is no electronic system to keep track of the inventory. He and his employees do a physical count or guesstimate to see what items need to be ordered. The employees are not very computer-savvy. How can he implement an inventory tracking system that will be as easy as possible to put in place and learn to use?
Retail tracking and inventory systems have come a long way and are incredibly simple and easy to use. You’ll just need to work with your father and his team to research a system that will work best for everyone -- because he's missing huge cash flow and profit opportunities by not “modernizing” his operation.
Finding the system, you’ll discover, will be the easy part. Getting everyone on board with the switch over will be the challenge -- especially if a specific team member’s position involves the manual count.
This may mean you will have to shift people into different customer service positions or may mean some people need to develop new skills as a result of system training. This is all part of moving your father’s operations from the “chaos” of not knowing the true numbers he needs to better run his business to the “control” of having a better understanding of what he currently has in inventory and the products and inventories that move best.
Two suggestions to help with this transition:
1) Let everyone know what is going on -- and have a common goal everyone can adopt and own. Maybe it’s getting everyone to agree to a 90-day implementation as “effortlessly and seamlessly” as possible -- with the additional goals of knowing all the numbers (stock, inventory, profit margins, etc.) in the business, and increasing current sales by 20 percent.
2) Show your father an easy revenue-generating benefit of the new system implementation with a challenge: Find his best-selling product or service, and increase its price at LEAST 10 percent (or even more, say 25 or even 50 percent), and then track to see whether there is a noticeable increase in both cash flow and profit within a fairly short window of time.
These types of changes work best if you can always put them in the context of “what’s in it” for your team -- the larger goal being a better-run, more efficient, more productive and ultimately more profitable business -- which in turn helps everyone, including your customers.
