Never take for granted the security and integrity of your asset management. There might be locks on the warehouse at night, a system for signing out supplies, a paper trail for processing a customer order and even a security guard at certain sites. However asset vulnerability is much more than being susceptible to actual theft. It is any condition that leaves your inventory open to losing product, information, time and money.
Indicators of Vulnerability
Consider the following common signs of the vulnerability and see if any of them apply to your business:
Do you know how many items you have, where they are and who last touched them? If not, you are not managing your inventory effectively. All too often, it is careless or rushed employees who accidentally store an item in the wrong location or forget to log it in or out. It might be a small tool, a case of first aid supplies or a vehicle.
No matter what the size or cost, that item is lost to your inventory. What is particularly worrisome is that you might not even realize there is something missing. All you can do is hope that someone will find and restore the item to active use.
Unfortunately, there are employees who will take advantage of a weak tracking system to steal assets, whether equipment and tools, or consumable supplies. Would you know immediately if there are items stolen or do you have to wait until there is a question mark on a monthly report? Is it possible you would never find out?
- Time Spent Searching for Items
Do your employees spend time searching for misplaced items? Do you even know how often that happens? Are these incidents logged? Are there personnel issues because employees are blaming each other for misplaced items?
Is your auditor able to ensure the accuracy of the inventory count? Is he able to allocate costs to the inventory, identifying items past their prime or missing in order to monetize his findings?
- Inventory Shortage or Overage
Is your inventory often caught short of product needed by employees or customers? Or, are there supplies and equipment stored in dark corners that will not be used for months, if ever?
- Unreliable Inventory Records
Can you rely on your inventory records to plan your operations? Are you confident it is time to replace certain equipment or tools? Do you need to order more product to ship to customers or is there already more than enough on hand?
Financial Consequences of Asset Vulnerability
If your assets are open to carelessness, theft and mismanagement, your bottom line will suffer. Even a business that is profitable is either losing money unnecessarily or not realizing its sales potential. Unfortunately, every single human and system weakness error can affect your company’s financial health in the following categories:
Financial loss is obvious when products disappear, whether through negligence or theft. The loss is mitigated if the items are simply misplaced and eventually show up. In the meantime, however, it can mean a loss of revenue as you can’t use or sell what you can’t find. Or, it might mean cash outlay if the missing items must be replaced if the work is going to be done.
When your employees are searching for misplaced or lost items, they are wasting time away from their primary jobs. If the same one or two employees regularly misplace items, you probably want to look into ongoing performance issues. Whatever the frequency of carelessness or value of the individual items, there is always a negative impact on overall productivity.
A side effect of frequently misplaced items is the negative impact on the relationships among your employees. If it appears that one person is always causing trouble for the others, the blame laying game begins. When there is continual tension and frustration in the work environment, productivity drops.
The productivity calculation is quite simple: a decrease in employee output equals a decrease in company profits.
One of the most significant results of asset vulnerability is damage to your customer base. Usually, it is a product problem. If product is regularly misplaced or stolen, there will be ongoing shortages so orders cannot be filled as they are received.
Even if items are not lost, if there is sloppy, inaccurate, incomplete record keeping, you will not be able to plan your inventory effectively. The result is the same: unhappy customers. A diminishing customer base equals decreased profits.
Strengthen Your Asset Management
Whether your operations focus on providing products or services, it is essential that you are able to access accurate, up to date, complete data about all your inventory. Fortunately, there are many affordable, user-friendly software packages available to help you organize all your fixed and consumable assets.
Install one of these systems and you will have information about the volume, kind and movement of the assets in your warehouse, stockroom or on the road. You will know immediately if something is missing, or needs repair or replacement. You will receive alerts to reorder or move stock from location to another. All the information available can be customized to your particular operation.
There is no need for your valuable assets to be vulnerable to loss or mismanagement. IntelliTrack has a full range of software solutions for asset tracking and inventory management. Check out what is right for your industry at: http://www.intellitrack.net/barcode-inventory-software.asp