The Disadvantages of Inventory Control

In a business environment where even small businesses have products that ship all over the world, inventory control and management have grown in popularity. These services provide a supply chain that keeps tabs on products through every stage of development, and allows management to get real-time estimates of their available stock throughout the day. Even with all this power, there are several disadvantages to inventory control worth considering.

While inventory control allows employees at every level of the company to read and manipulate company stock and product inventory, the infrastructure required to build such a system adds a layer of bureaucracy to the process. In cases where inventory control is in house, this includes a number of new hires that are now present to regulate the warehouses and facilitate transactions. In cases where inventory is controlled by a third party (e.g., InMan or SAP), the cost is a subscription price and dependence on a separate company to manage your infrastructure. Either way, this means a larger overhead and more layers of management between the owner and the customer. From the customer's standpoint, this means a problem that requires senior management to handle will take longer to solve.

Another disadvantage of inventory control is a lack of personal touch. Large supply chain management systems make products more accessible across the globe, and most provide customer service support in case of difficulty, but the increase in infrastructure can often mean a decrease in the personal touch that helps a company stand out above the rest. For example, the sales manager of a small manufacturing company that sells plumbing supplies to local plumbers can throw in an extra box of washers or elbows at no charge to the customer without raising any alarms. This is done for the sake of customer relations, and often makes the customer feel like he is unique. While free materials can also be supplied under inventory control, processing time and paperwork make obtaining the material feel more like a chore for the customer, or even an entitlement.

Although inventory control systems give you a better handle on the amount of stock you have and have sold, the same systems can hide production problems and cause customer service disasters. Since the focus is on inventory and not quality control, broken or incorrect items that would normally be disqualified are shipped along with correct items.