Wasp Barcode Inventory Management White Paper - Manual (Page 2)

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Introduction
Whether you're looking for a printer cartridge or medical vial stored in the supply closet; searching
for an installation part in a warehouse or seeking a box of the high-end sunglasses promoted in your
boutique's latest newspaper ad, inventory management is a critical component of any small or
midsize business. However, many business owners do not fully realize the costs associated with poor
inventory management, or the potential opportunity for improvement.
Inventory management, after all, requires a delicate balance. You must carry enough stock to satisfy
customer demands, yet overstocking can tie up valuable working capital, create inefficiencies and
lead to write-offs of yesterday’s fads. You don't want your maintenance staff sitting idly as they await
delivery of repair parts, nor do you want your warehouse to resemble General Motors. Today's
technology empowers you to focus on your business while simultaneously ensuring that you maintain
the right amount of inventory, office supplies and repair parts without over- or under-investing.
Taking Inventory
Inventory organization alone is critical. Add up the minutes, even hours, employees spend searching
for stock or supplies, and this effort becomes seriously expensive. If they cannot locate an item,
employees often will order replacement inventory, incurring rush-shipping charges, and the
additional expense of the redundant stock item. In the medical field alone, the average healthcare
organization wastes more than $1 million in supplies each year, noted Linda Leekley, RN, and
President of In the Know.
Tabulate the tens of thousands of
dollars a business can all-too-easily tie
up in inventory, and it quickly becomes
apparent that inventory consumes
precious capital, becoming a huge
drain on cash flow. In the retail sector,
inventory inaccuracies due to administrative and paperwork errors contributed nearly 15% –
or $5.59 billion – in losses, according to the 2008 National Retail Security Survey Final Report.
As a rule of thumb, yearly inventory carrying cost is between 25% and 35% of the average value of
stocked inventory. Therefore, if your retail business stocks an average of $100,000 of inventory, your
annual carrying cost is $25,000 to $35,000. At a 15% loss rate, your organization has just incurred
an expense of $3,750 per year due to missing inventory.
Unfortunately, the costs don't end there. If retailers and distributors don't pay careful attention to
their inventory, they also have to pay for storage for excess inventory, deal with obsolete inventory,
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Taking Stock of Your Inventory
In the retail sector, inventory inaccuracies contributed
nearly 15% – or $5.59 billion – in losses.
- 2008 National Retail Security Survey Final Report