Inventory management is an integral part of a company’s ongoing internal activities. It allows a business to keep track of spending on inventory and also providing an accurate account of inventory or stock on hand. Although, most of us see this concept as something that we might not encounter often, it in fact affects us on a daily basis.
Last class we learned about this vital business concept. This made me think about my experience as a consumer dealing with poor inventory management. It all started last week when I went to a store to purchase a new flat screen TV. Prior to doing so, I had went on the company’s website to look up the price of this item and to see if they had it in stock at the store location nearest to my job. According to them, they did. However, when I was there I could not find the product on display or on the shelf. Fortunately, I printed the item information in advance and proceeded to ask for assistance. The customer service representative looked up the item and found that there were 3 remaining. Although it appeared to have been in stock, we look all around the electronic department and we had no luck finding the particular flat screen TV I wanted. Perhaps, it was misplaced or lost in the huge store? Regardless of where it went, the fact of the matter is I left the store with nothing. As a result, this cost the business money and a potential customer.
This experience along with what I learned in class made me realize the importance of inventory management. Not only can managing inventory help a company run things smoothly, but it can also provide customer satisfaction. By having an accurate account of products in stock and be easy to locate, items can be identified and given to the customer. Although inventory management software is important to have, it is also crucial to be able to know how to use it in order to be effective and efficient. Has anyone experience this situation before? If so, was it at a large or small store?
This situation has happened to me before but in other stores. I would definitely be upset especially since their website and customer service said they had items in stock. I wonder if the products were misplaced, or someone made an incorrect physical count of the items, and also how many other products were affected. I hope the store manager would take a look into that because in the long run it will affect their sales a lot.
I have definitely had this problem before. It was also at Best Buy. Around Thanksgiving I was shopping for a new flat screen tv but of a particular size. At two stores, one including best buy, they both offered the same size tv but for different prices. However after to both stores to look at the tv I was drawn to best buy because of their reputation. That same week, bestbuy.com advertised the exact same tv I was looking at for $80 less than originally sold at (one of their deals of the day) and so I went to the store and they were going to give me the same price for the new tv if I bought it in store. Unfortunately their computers said they had 5 in stock and could not locate any of them. I left the store empty handed and the sales people did not getmy business. They told me they could order me one but that it would take another 8 weeks to get in. I turned down the offer because I did not want to wait that long. I ended up buying it online and the tv arrived 3 days later.
It doesn’t make any sense that the online order would take less time than buying it in the store. I think that inventory management in stores needs to be upgraded because this problem seems to be occurring more often and often leads to purchasing online. The stores lose out on the sales which is why a lot of stores have been going out of business and the Internet companies like amazon have been doing fairly well given the economy.
I have been in this situation before with shoes! This was a small store but they are always busy! I found a pair of shoes in the ads, went to the store and left the store with nothing. They checked their system and saw they had one pair left in my size, but couldn’t find it on the floor or in the back. So my choice was ordering it online and pay s&h or just not buy the shoe at all. If I ordered the shoe online and the shoe didn’t fit then I would have to pay s&h to return it. So I chose to not buy/order the shoes so they lost a potential sale.
Inventory management is a crucial part of a business. I don’t understand how a store can say they have an item in stock online and then it not be there. I think that is different than saying it is not in stock at all. Especially in your case with a flat screen, you specifically went to that store because you did your research and they said they had that flat screen. They didn’t and it was a wasted trip and should of been able to be avoided. A store needs to keep up with their inventory online matching what’s in the store or else they will lose their customer clientele.
I agree with your opinion that poor inventory management can not only increase cost but also loss potential customers. It is very important for a store to have correct inventory information for their customers. Although I haven’t been in this situation, I would very disappoint if I didn’t get the product which I expected to get it.
This has also happened to me at Best Buy. I first looked up to see and I even called to see if they had a certain computer monitor that I wanted and both told me it was there. When I got there, no matter where I looked I couldn’t find it. I asked for help and they couldn’t find it either. I was very disappointed and told them how I even called. Yet, they couldn’t do anything about it. Because of this I ordered it online and Best Buy lost a customer. This makes inventory management huge, because situations like these not only lose the sale of one product, but makes people like me not want to go there anymore.
Unfortunately I face the same problem with my car dealer. A very well known dealer on the island and whenever I take my car for service and have complains on the car. The service centres do their job and provide me with an estimate for the parts needed. And every time I have this answer by the service advisors “the parts are not available, we will order them”.
I really get pissed off every time I take my car to the dealer, and certainly this will let me revise my decision of buying the same type of car in the future.
I actually just recently was put in the exact situation. I was at my favorite boutique and saw a blouse that I was absolutely in love with on the rack in my size. I was, however, reluctant at first to buy it and said that I will go home, think about it and judge based on reason and not impulse or emotion. I went back to the boutique in three days and asked saw the same blouse in a size too big for me. I asked them to check if they had my size in stock, and when they checked in their directory, they did! I was relieved, but after 10 minutes of searching in all their stock rooms, and making sure that the people in charge of store design did not take the blouse to fit it onto a mannequin, my blouse has seemingly ‘disappeared’. To my dismay, the store could not do anything, they apologized for their lack of efficient inventory management (even for a boutique that is barely 1,500sqft in size) an compensated me by ordering my blouse from a nearby store and delivering it for my door. Instead of risking losing a customer, the boutique ensured that a) I was satisfied with their service by delivering it to my doorstep free of charge, and b) I was compensated for their shortcoming with regards to the lag in their inventory management. I hope they take my experience and their costs as a result of this mistake (time, opportunity costs and paying for my delivery fee to keep me as a customer) has made them realize the importance of effective inventory management!
Poor inventory management is no doubt a big dissatisfier. I experienced it several times with one of our leading telecommunication company’s in Bahrain. When the Blackberry Bold was about to launch in Bahrain they set up a whole ‘Reserve your phone’ campaign four months before it launched, and what was disappointing is that they still managed to deliver people’s phones three months later than the launch date.
In another instance, I wanted to change my package and the call center agent told me I was eligible for an upgrade and I may chose whichever phone I wanted. I asked for a specific phone and he told me i may visit any of their retail stores to collect it. Coincidently the phone was out of stock in the store I went to, and they were unable to check which other retail store had the phone because they just did not have the system for it.
This situation has happened to me in a large store where I called them to check the availability of the item and they confirmed that the item I requested is available. But after visiting the store the customer service representative says that the item was out of stock since one week ago!! Whatever was the reason the important thing was that I left the store unsatisfied and I was communicating the same with my friends and relatives. Inventory management is very important to satisfy customer demand at any time which will leads to successful business and strong reputation as well.
I am in total agreement with you. I have been facing this recently with many stores in Bahrain. I call, as per the system they have the part, I go there, its unavailable. Unsatisfied customers = customers who will never come back! At least for me, if I go to a store and it happens twice that I don’t find what I wanted while its listed. I never go back again!
Great subject, thanks to leonardoc301. Actually, I faced this issue in small stores, but when in it comes to large stores, they are perfect. Thanks for the technology, the best store I think who I deal with is Amazon. They are perfect, they provide you with an online inventory and I had never faced problem with them and I think they gained the user satisfaction and they do great success and managing inventory system is one of their success. However, managing inventory can be applied in many areas and recently we bought a computer system in our working place to master counting inventory procedure for auditing purpose. Managing inventory is an integral part of enterprise operations management and without it, the company can lose a lot.
I totally agree that Poor inventory management will lead to unsatisfied customers, and it would also create new opportunities for competitors!
Companies and organizations should be careful when dealing with inventory management because bad inventory management might lead to losing customers to competitors. I have been through such situation several times (not sure if it’s inventory problem or customer service problem), where the required item was out of stock and it would take around one month to get the next shipment of that product, so in such cases, I looked for alternative shops (competitors of the first shop) where I could find a similar product that would satisfy my requirements, even if the price might be a little bit higher.
In actual practice the vast majority of manufacturing and distribution companies suffer from lower customer service, higher costs and excessive inventories than are necessary. Inventory control problems are usually the result of using poor processes, practices and antiquated support systems. The inventory management process is much more complex than the uninitiated understand. For example, if a customer orders a product that requires a manufacturer to acquire 20 part numbers to assemble a product and then, only 19 of the 20 part numbers are available, you have nineteen part numbers which are excess inventory. Worse, the product can’t be shipped to create revenue and the customer is not serviced. Think for a moment about the complexities of making products that require hundreds and maybe thousands of part numbers to be available in the right quantity, at the right place and at the right time to make products to satisfy customer orders. It is a complex network to control and a set of inventory management tasks that must be performed with precision.
I have faced this situation in my work. we have acquired a coffee machine from one of the well known coffee providers. We tend to buy coffee supplies from them from time to time and have faced afew situations in which the company had no stock of supplies due to poor inventory management. We had to resort to buying supplies for longer periods and are thinking of changing suppliers. Poor inventory management leads to dissatisfied customers which would result in lost sales.