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10 ways to stop profitleaking

Maintaining inventories – Inventory asset management is a primary  focus of operations. In a highly competitive market, distributors are constantly looking for low-cost suppliers. Inventory turns are also a concern, as is maintaining accurate costing and pricing for a complete profitability picture.

Real-time decision making – Throughout a given day, customers frequently need immediate access to historical or current data concerning the company’s operation. As a result, there is a pressing need for fast generation of reports or online inquiries.

Inconsistent, questionable data across the business – when multiple software systems are being run for different business processes in the workflow, companies often find it difficult to reconcile inventory, or shipments do not align with sales orders.

Costly manual entry into systems – for those businesses that have not automated all their information systems, doing manual entry is costly and time-consuming. Many hire temporary staff to do this task while others outsource.

Duplication of entry for non-integrated systems – even companies with automated business systems sometimes are running multiple software packages that are not interoperable. As a result, some data must be entered in duplicate, which creates delays.

Unreliable processes to transfer sales orders to shipping – many companies still post sales orders on a board in shipping area. These processes are inherently unreliable and result in missed customer orders or inaccurate shipments.

High overstock in inventory – without visibility into the inventory systems, companies do not know the status or availability of finished goods. As a result, purchasing personnel often overstock to avoid shortfalls. This results in overbuying and unnecessary inventory-carrying costs.

Lengthy inventory reconciliation and end of month closing – inventory reconciliation is a lengthy process in a non-automated company. As a result, period-end closings can require that the entire business information system be frozen until all accounts are reconciled.

Inability to scale the volume of existing MIS systems – some companies find that they cannot scale their automated information systems to meet the demands of their growing businesses. As transaction volume increases, many software systems grind to a halt or have unacceptable delays to accomplish everyday tasks like generating reports.

Customer satisfaction issues – delayed or incorrect orders can mean customers will quickly go elsewhere for product. The ability to fulfill orders accurately and on time is highly correlated with repeat sales.

Delays in action and problem resolution – without immediate access to historical and current customer data throughout the business, customer service representatives are challenged to resolve customer queries fast. This is true not only for customers but for any employee or manager with a question about the business.