Improving Customer Service With Effective Inventory Control
How to Improve Customer Service With Effective Inventory Control
There are numerous benefits of having an effective stock control system in place. One of the primary benefits of stock management is to reduce costs while increasing warehouse efficiency. However, stock management also has a key role to play in improving customer service.
5 Benefits of Managing Stock Effectively
Poor inventory management practices can have a negative impact on customer satisfaction levels. Yet, these are often easily resolved by having an effective stock management system in place.
1. Prevent understocking
Stock management is all about getting the right balance between carrying too much stock and carrying too little. While carrying too much stock may seem like the perfect solution to keeping customers happy, it has negative consequences in terms of your balance sheet. Your capital will be tied up in unused products, and you’ll be incurring unnecessary warehousing costs by keeping it.
Running out of stock, on the other hand, can have a severe impact on customer satisfaction levels. If you can’t meet customer demand, this not only leads to reputation damage, it can also affect your sales figures, as your customers go elsewhere. Having an automatically updated stock control system in place means that you can deliver your promises on customers orders.
2. Forecast seasonal trends
Aside from day-to-day stock control, any wholesaler needs to be aware of seasonal fluctuations in demand. Even with the most careful management of inventory, customer service levels can suffer if you experience a sudden spike in demand. Just like understocking in general, running out of stock during the peak season can result in damage to the public perception of your business.
Having an effective stock management software in place helps to mitigate against this risk, as it will provide sales forecasts and trend information around seasonality - meaning that you can plan for this in advance and ensure that you have the right levels of stock at the right times.
3. Reduce lead times
When running a successful wholesale business, you not only need to have the available stock, you also need to be able to fulfill customer orders in a timely fashion. Long lead times can mean that your customers may look for other suppliers, while simultaneously questioning your customer service levels.
An effective inventory control system is beneficial for distributors in two ways. By analysing your sales, you can see which products are most popular and when demand tends to spike. Using this information, you can then ensure that your high demand items are replenished quickly, keeping availability high and directly feeding into improved customer satisfaction levels.
4. Helps to set sustainable pricing
In order to grow your wholesale business, you’ll need to ensure that your pricing is sustainable. It can be tempting to set competitive prices when your business is growing, but this can lead to negative customer experience in the longer term. For example, if you find that you need to increase prices later, this can result in customer dissatisfaction - particularly if these changes are not well communicated. An effective stock management system can help you to set more sustainable pricing, by allowing you to get a solid view on how your margins are broken down.
In addition, an effective inventory management system can potentially help you to gain new customers. By cutting down on the time products are sitting in your warehouse, your inventory costs will lower - and you could pass these savings on to your customers.
5. Process returns more efficiently
A central aspect of providing great customer service is exceeding your customer’s needs and expectations. This is particularly true when it comes to processing returns.
Anything that can be done to make the returns process easier will help to increase customer trust in your wholesale business. Yet being able to process returns more efficiently also helps you to ensure that the value of these items is restored to your business; OGL's ERP system allows returned stock to be visible, meaning that it can be inspected and the appropriate action taken.
Our business software division specialises in award-winning ERP software for stockists, distributors and wholesalers. Learn more about OGL Software or contact us to begin improving your inventory management processes.