{"id":1107,"date":"2017-07-20T12:45:12","date_gmt":"2017-07-20T20:45:12","guid":{"rendered":"http:\/\/smartermanager.com\/blog\/?p=1107"},"modified":"2018-03-14T04:48:50","modified_gmt":"2018-03-14T12:48:50","slug":"3-reasons-overstocking-just-harmful-understocking","status":"publish","type":"post","link":"https:\/\/www.smartermanager.com\/blog\/3-reasons-overstocking-just-harmful-understocking\/","title":{"rendered":"3 Reasons Why Overstocking is Just\u00a0As\u00a0Harmful As Understocking\u00a0"},"content":{"rendered":"

\"3<\/a><\/p>\n

The inventory management list of harmful practices exceeds three reasons depending on the type of manufacturing business you run. We have compiled the top 3 Reasons Why Overstocking is Just\u00a0As\u00a0Harmful As Understocking using the thirty years of working with manufacturers to\u00a0solve and implement better inventory management process. It\u2019s no secret that understocking inventory can hurt your bottom line. No business owner wants to risk ending up rejecting projects, proposing\u00a0longer turnaround times,\u00a0or otherwise disappointing customers due to inadequate stock.<\/p>\n

 <\/p>\n

All the same, it is worth pointing out that overstocking inventory can be just as harmful — even though the effects aren\u2019t always felt in the same dramatic fashion. Here are three ways in which overstocking can cause financial hardship for manufacturing companies.<\/p>\n

 <\/p>\n

Below are the\u00a03 Reasons Why Overstocking is Just\u00a0As\u00a0Harmful As Understocking<\/h2>\n

 <\/p>\n

    \n
  1. Decreasing Working Capital.\u00a0<\/b>Access to capital is not always easy to come by. And even if you\u00a0do have the option of\u00a0taking out a business loan from time to time, it\u2019s always in your best interest to avoid\u00a0the inherent risk and the interest payments that come\u00a0with\u00a0loans.\u00a0The more cash your business has on hand at any time, the lower the chances are that you will be forced to look at loans at all. Buying new inventory before you need it eats away at your momentary access to capital even in the best of scenarios.<\/li>\n
  2. Warehousing Costs.\u00a0<\/b>Of course, storing\u00a0inventory\u00a0isn\u2019t free. The cost of renting out a warehouse, maintaining it, organizing it,<\/a> and protecting the items you have stored inside can be substantial — and these expenses tend to be higher\u00a0the more inventory you are storing.<\/li>\n
  3. Depreciation.\u00a0<\/b>Wear and tear can eat away at the value of your inventory over time — and changes in demand or technology can even render your inventory obsolete. Keeping a smaller inventory helps you remain more adaptive to change of all kinds.<\/li>\n<\/ol>\n

    As you can see, both understocking and overstocking can be quite harmful to your business and to your bottom line. That\u2019s why investing in better inventory management simply makes sense.\u00a0Visit\u00a0SMe\u00a0Software online to learn more about our specialized\u00a0inventory management system.<\/a><\/p>\n

    \n

    \n

    <\/p>

      <\/ul><\/div>\n
      \n
      \n\n\n\n\n\n\n\n<\/div>\n

      Your Name (required)\n<\/p>\n

      <\/span>\n<\/p>\n

      Your Email (required)\n<\/p>\n

      <\/span>\n<\/p>\n

      Your Phone (required)\n<\/p>\n

      <\/span>\n<\/p>\n

      Company Name\n<\/p>\n

      <\/span>\n<\/p>\n

      Subject\n<\/p>\n

      Your Message\n<\/p>\n