Inventory management is important for service businesses of any size as a shortage of inventory can be detrimental to customer satisfaction while too much inventory carries the risk of theft, damage or shifts in demand along with costs of storing and maintaining.
Inventory management is the process of ordering, storing, warehousing and processing a company’s inventory. Knowing when to restock inventory, what amounts to purchase, what price to pay and sell can easily become complex decisions. Small businesses will often keep track of stock manually to determine when to reorder and quantities and larger businesses will use enterprise resource planning (ERP) systems. Appropriate inventory management strategies vary depending on the industry. Inventory management methods include just-in-time (JIT), materials requirement planning (MRP), economic order quantity (EOQ), and days sales of inventory (DSI).
The following are steps Sage recommend to improve inventory management (and paraphrased here): Evaluate your current practices; Perform routine stock reviews – for lost, damaged parts, routinely review your physical inventory for accuracy with your records; Systematise stock replenishment – as a minimum have a policy to replenish inventory at set levels; Learn customer behaviour – track and try to identify any trends such as seasonal or other factors that affect your parts flow.
“The more inventory a company has, the less likely they will have what they need.”
As a service business, it is critical that your field service team have the spare parts available to them for carrying out specific jobs. These jobs can be scheduled maintenance of specific equipment and assets or emergency callout jobs. In the case of maintenance schedule, the details of the equipment and assets to be serviced will be known when scheduling the job and with good inventory management, a parts kit can be dispatched with the engineer. For emergency callouts, the more exact detail that the customer can provide about the equipment, the better the chance of the correct parts being dispatched with the job. With good asset management and knowledge of the customer’s equipment, customers can use apps with a barcode scanner to send exact details to your service team.
The parts used during the maintenance or service call can be tracked and accounted for with dedicated field service apps integrated into your inventory management system whether it is for example Sage, Xero, Navision or other inventory management systems.
All while not distracting the field service engineers from doing their job i.e. looking after your customers!
See how Arantico can help you improve Inventory Management with real-time management of your field-based service engineers.