Is Inventory TOO Important?

After reading different blog posts and learning from the class, clearly inventory is valuable. How valuable probably depends on a company by company basis. However from my previous job experience, I found that maybe too much value was put on inventory. The past couple of summers I worked at Follett School Solutions, in the warehouse. Follett is basically a textbook distributor. We don’t make any books, we just buy and resell. Part of the job is finding the books in the large warehouse. After the books on the order are found, they are passed on to the next line of people (packers), who clean and pack the books. Finding and collecting books, especially a large order, can take a long time. After cleaning, packing and counting the books, often times the packer will realize that they are short some books. Once they realize this, they bring the books over to a different group of people (inventory auditors), who then look in the warehouse to get more books to fulfill the shorted order. Sometimes they don’t have the books on hand (in the warehouse) to complete the order. This is where I take issue with my company.

I’ll give a common example of a situation like this. Let’s say a school orders a variety of 300 textbooks in September that need to be shipped as soon as possible, since school has already begun. The packer sees that they only have 299 books, and they are short 1. They bring the order over to the inventory auditor, who then recounts to make sure, and then looks in the warehouse to find that 1 extra book. More times than not, the inventory auditor will come back empty in their search to find the missing book. Personally, I would ship out the 299 books on hand and then ship the 1 extra book as soon as I could. However, Follett does not do this. Follett will order 1 book from the textbook maker, and wait for the book to arrive, and just push the 299 books to the side. This could take 2 or 3 days and sometimes longer if the textbook company does not have a book on hand themselves. Meanwhile, the school that ordered these books is in session, and can’t begin teaching the subject since they don’t have the proper materials on hand. Ask any teacher how 2, 3, or 4 lost days can destroy a lesson plan. Yes, the school shouldn’t have waited so long to order the books, but still, Follett only makes matters worse by not shipping out a large order that needs to be sent ‘ASAP’.

In my opinion, it’s not a big deal to just ship out 299 and then wait however long for the 300th book to arrive.  I am not sure what these schools do while they wait for their books to arrive. In my opinion, the goal should be to get the books to the customer ASAP. Inventory is important, but jeopardizing and delaying orders because of being 1 short in inventory seems ludicrous to me.

Am I crazy? Or does this not make sense to you either?

13 thoughts on “Is Inventory TOO Important?

  1. Really interesting post and I hear what you are saying. I agree with you that Follett’s shipping method doesn’t really make sense. At my previous college, the bookstore was affiliated with Follett, and there were times when I experienced having to wait for them to get a shipment in, usually, at the last minute. Thankfully, the books got to the store just before the semester started, but it was frustrating, waiting and wondering if I would have a book for class. I think your suggestion makes sense for the consumers. I believe most teachers and students would rather have most of their books on time, and just have to wait for the missing ones to come in later. That way, not all classes are affected.

  2. I totally agree with you! It is ridiculous to put off the 299 books until that one missing book comes in meanwhile school has already started. Having all 300 on time would make the company look best but sending 299 on time with one missing is the option I would take. I am sure that the student that needs that one book would be accommodated by the professor and no one else would be set back. It’s one student affected versus 299 affected.

  3. I definitely agree with you. It makes more sense to ship out the 299 books to the school so only one student will be without a book rather than all 300. The school and professor will be a lot happier with the 299 books then having no books at all for their students. This example of Follett’s shipping method does not make sense and causes their customers to suffer and may cause their customers to switch to a different company.

  4. Very interesting article! I completely agree with the original poster that sending 299 books out versus waiting for 1 book to properly send 300 is a waste of time for the firm and for the customers/schools. However, I think that people reading this article also have to look at the opposite side of this equation. Perhaps Follett has had issue in the past about incomplete orders, and has used the above strategy previously, to which they had seen nothing but complaints for missing books and waiting for extra copies. Perhaps Follett relies on complete orders and only sending out materials/packages once they have been inspected to be 100% complete and finished. Many large firms have a certain quality control strategy that prohibits them from performing/sending any unfinished service/product in order to ensure top customer experience and satisfaction for their firm. Great article, very thought-provoking!

  5. I agreed that it is nonsense to wait for just one book in such large order. However, maybe it was because the company’s policy/quality control like arman30123f14 said. It would be much more easier for both accounting and sales departments to do their jobs if they waited for the one last item in the order. It is hard to say that what Follett did was right or wrong. From a customer’s standpoint, we can interpret that the company is not being flexible, or we can view it as Follett was just honoring their agreement that no incomplete/unsatisfied order will be shipped to the customers.

  6. I totally agree with you and the other comments. Waiting for that only book to arrive does not make any sense! I am not familiar with this system, but I think they do that so they do not waist money in shipping the remaining book. If they do not want to deal with these kinds of problems, they should definitely plan much more ahead. Great post!

  7. This is a really interesting post and I really liked hearing about your experience. However I have to disagree with you and take the side of your company. While you bring up a good point about shipping the books as is and then filling the order when the extra book arrives, think about how that will impact a child. The student will have no book to read and will be left behind in class. The school can’t allow that to happen, so they probably would receive 299 and wait before distributing the books to the students anyway. However, I do agree that occasionally companies can become obsessed with inventory and it ends up costing them in the long term.

  8. I think the system set in place is a poor one. Definitely shows some problems within the inventory management. The buyer should know exactly how many the seller has on hand before they order. They should set a physical check procedure before an order is placed instead of disappointing the customer in the long run. Sometimes products do get lost or ruined, but I believe it is better to inform the customer about the shortage as soon as possible and send out what they do have on-hand. They should have the 1 book shipped directly from the textbook maker to the customer to also save time.

  9. I definitely agree with you that it makes more sense to ship the 299 out, and then finish shipping the order when the last book arrives. That way the students can receive their textbook and not get behind on any material. This is a interesting situation, and I wonder why Follett’s policy is the way it is. Maybe it is because they do not want to look unprofessional by sending a uncompleted order. I personally think it would be a little unprofessional if I ordered something and the company shipped it in multiple orders with days in between. It could also be an extra shipping expense that they are trying to avoid. Great write up on something you experience first hand.

  10. So here’s the thing. I don’t think you are crazy but inventory does matter. You said you were working with textbooks which let’s say are 100-300 a piece. What if it was a larger number? What if you were working with high end cars that are a quarter million and higher? Let’s step in to someone else’s shoes because I am not rich (jaja). So let’s say I hit my mid-life crisis and decide to buy 2 brand new Lambos. I call you and I pay you because you tell me that you have those two in stock. Next thing you know, your inventory says 2 but you physically see only one car. As the customer who just paid for the cars in advance would lose my marbles because it’s going to be some days and possibly weeks before I get my quarter million dollar car. I know the example is beyond crazy but a 300 dollar book missing is not the same a a Lambo missing. Now, if I was the owner of the dealership and a Lambo is missing, you better believe I am going to go through hell and high water…and back to find out what exactly happened to that car!

    I apologize for using a Lamborghini reference. (<—- pretty expensive car with the bull emblem jaja)

  11. I can definitely see your frustration in the situation, and as students we all know too well what a couple days without a book can do with staying on task and following the lesson plan.

    I see a couple different issues with this situation. With a warehouse as big as Follett’s they should have some sort of inventory management system that should know how many books they have at all times and where the books are stored. Now understandably a book here or there can go missing, it happens. But for it to change that many hands before anybody knows what’s going on I think is a bigger issue. I see wasted time, lost money, lost inventory, and now an unhappy customer!

  12. I can definitely relate to this working retail for many years I have had to deal with inventory a lot. SO many times in the store we will get huge shipments of a new item and it wont be as popular as the store thought. In about 3-6 months from the order you see the item on sale. Its hard to tell what the demand will be for some items.

  13. While you make a good argument, you must also consider that a business cannot operate without inventory. Not only is inventory an asset to a business when they obtain it is also important. The cost of goods changes so a business must consider this when the need to restock because the more moneythey save on inventory the greater the profit they will receive. Inventory management is key in all business that carry inventory because the lack of inventory may prevent a business from operating. On the other hand, having too much inventory can be a bad thing because that product may become less popular so having too much of that product may be a negative thing. Inventory management can have a variety of implications on a business because having too little of a product m will result in the loss of a sale, and having too much may result in the missed opportunity to buy a new product.

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