What is inventory shrinkage? Businesses that need storage and warehousing services ask this important question and take steps to prevent it.
Streamline Fulfillment offers personalized shipping and storage solutions so you can focus on growing your business. We make the warehouse and fulfillment process stress-free and provide the following insights into controlling inventory shrinkage.
Understanding How Inventory Shrinkage Affects Businesses
The shrinkage rate for inventory measures the difference between the recorded and actual stock. Imagine your website says you have 100 bars of soap in stock, and a client wants to order all of them. However, when you check the warehouse, you only find 98 bars.
Several things can cause the discrepancy, including theft or a lack of auditing. This puts you at risk of disappointing customers and requires you to spend valuable time correcting the issue. Missing inventory also requires spending money to replace it and represents a loss of potential profit.
Reliable Strategies for Preventing Inventory Loss
By engaging in loss prevention strategies, your business saves time and money and helps create loyal customers. Follow these inventory management tips to keep stock discrepancies minimal.
Incorporate Techniques To Reduce Theft
Theft and pilferage are major causes of lost products and mismatched records. Investing in the following can significantly reduce the problem:
- A network of surveillance cameras helps staff monitor the warehouse in real time and react promptly.
- Attaching anti-theft devices to each product can deter thieves from taking inventory they can’t use or sell.
- Hire or outsource a security staff to quickly and competently handle any problems.
Schedule Regular Inventory Auditing
What is inventory shrinkage? It’s a problem that regularly arises from a lack of auditing.
Many businesses settle for an inventory count once or twice a year. However, if you’ve experienced a problem with missing products, more frequent audits will help. Consider having employees conduct a detailed assessment at the end of every week or month and always double-check the findings.
Establish Clear Guidelines and Procedures for Inventory
Develop a process for meticulous documentation and train employees to recognize scenarios that make the business vulnerable. Double-checking your accounting and billing process further reduces errors. Finally, thoroughly vet employees for any signs of criminal backgrounds or risks they pose to your inventory.
Rely On Technology for Automation
Improvements in technology and artificial intelligence have yielded incredible opportunities for preventing shrinkage. Software or cloud-based solutions can track inventory and billing immediately and make updates.
As an added benefit, relying on computers eliminates the chance of human error. While you may risk the occasional downtime or internet outage, those pale compared to the resources drained through inventory shortages.
Obtain a Personalized Approach for Storage and Fulfillment
Streamline Fulfillment can help you avoid the question, “What is inventory shrinkage?” We’re the experts in inventory management and fulfillment solutions. Instead of spending ample money hiring extra staff and installing security, we can accomplish the same results with a fraction of the cost and effort to your business.
Speak with a representative about your options by calling (509) 888-2880.