Everyone who loves doing inventory, raise your hand up! No one? That’s because it’s a minute, repetitive task that pretty much no one enjoys. And yet, have you ever wondered why exactly inventory disorganization is rampant, especially in the field service industry? Today, we’re taking the fire and security companies aside and talking about a few of the reasons they might be struggling. Read on to find out more about the 5 fire and security inventory management pitfalls you could be falling in!
Make sure to scroll to the bottom, we promise there’s a light at the end of the tunnel!
The most common way of doing inventory, especially if you’re a fire and security company who has just left its small business days behind, is using check-in/check-out sheets. Employees taking items in and out have to fill them then an admin compiles the data into spreadsheets.
There’s nothing wrong with this method if your team and inventory are relatively small and you trust the former to be responsible and organized. Many small businesses make do with this system because it’s free and if you’ve only got a shelving unit or two to watch, it’s also easy. But, with time, it can turn into a fire and security inventory management pitfalls.
Company growth is always good news but that means you need a proper storage unit or warehouse for your spare parts and other assets, as well as a bigger team. Now that you’ve got 20 or 30 techs running around all day, it only takes a couple of misplaced items and forgotten check-out sheets to turn your inventory system upside down.
The biggest issue is that there’s no inventory accountability. This means that you can’t know who does what so if you notice an issue, you can fix it, but you can’t work towards preventing it if you don’t understand how it happened in the first place. Proper inventory accountability requires you to log every action into a system together with the name of the person responsible.
The consequence of this fire and security inventory management pitfall is that people can take parts in and out, leave them in their truck, and then never return them. Your office person who logs those sheets into the spreadsheet can’t magically know where every part is so they write down the information they’ve received.
Then it’s up to the rest of the team to work with what they think they have. Which leads to the next inventory pitfall:
2. You have both overstock and understock in your warehouse.
What does a responsible operations manager do when they see a type of fire extinguishers are out of stock or running low? They send off a purchase order to the preferred vendor. But when the extinguishers arrive and another team member takes them to the warehouse, they discover they had another batch already waiting.
This is overstock – and doesn’t sound that bad. It’s not like extinguishers age like milk, right? Not at all! Overstock takes up costly space in a warehouse and takes longer to bring in profit, throwing a monkey wrench in your cash flow. Now instead of putting the money towards buying parts that really are out of stock, you’re stuck with a couple dozen bulky extinguishers.
Do we need to build a scenario for understock? Your techs can’t finish a work order if they don’t have the part they need. So how did we get here in the first place? Like we mentioned in our previous point, without inventory accountability, you can’t be certain.
However, it’s general knowledge that technicians are usually in a hurry to get from one appointment to another. And when you’re in a hurry because a customer keeps calling you to come back and fix the blaring alarm but you need to pick up a part first, no one can blame the tech for forgetting to fill in the check-out sheet, adding this to your series of fire and security inventory management pitfalls.
3. Your inventory forecasting methods are not accurate.
You could consider this fire and security inventory management pitfall another consequence of the previous one. If no one gets around to correcting the overstock (or understock for that matter!), you’ll be left with spreadsheets that show the wrong number of parts used.
Some very eager employees might make a note of it and forward it to the manager. In turn, they’ll have to sit down and track that particular spreadsheet and correct it then update it on the shared system. In an ideal situation, that is. But anyone who’s ever worked in a fire and security business knows that ideal situations don’t happen often. Things get busy and this means that there’s little time to spare for thorough admin.
You need a system that is foolproof and pushing papers around doesn’t even get close.
Except that having errors in your inventory management leads to inaccurate business reports. When your inventory forecasting methods ask for these error-filled spreadsheets, you’ll be left with inaccurate forecasts. You’ll then send purchase orders according to these forecasts and end up with even more over and understock in essential parts. This is one way for fire and security businesses to end up with terrible cash flow. Stock that sits around costs money and brings nothing in.
4. Employees are not properly trained to manage inventory.
Training your employees is essential in avoiding this fire and security inventory management pitfall. It’s one of the eternal complaints we hear from managers and business owners: ‘I want to introduce software to my company but my employees don’t want to use it.’
Their intentions are good. They want to introduce software that will help the company grow and become more profitable. But the execution lags behind. Employees are often apprehensive about new processes because they don’t think they’ll receive proper training.
Managing inventory is challenging as it is, but if you don’t train your employees properly, you can’t expect them to follow the new procedures. Great inventory management software implies a certain level of complexity so you can’t just expect people to know how to use it at first glance; it’s not just a phone app, after all.
Make sure to consult your employees! Try to understand why they’re reluctant to accept the changes. Computer Weekly reports that fear of change dominates staff that is confronted with new software, while ‘the biggest challenges businesses face in digital transformation are issues around culture and bringing people on the way.’ High quality training can help alleviate these fears and improve your relationship with your employees.
5. You don’t have a vendor communication plan.
Another pitfalls that’s too easy to fall in is sticking to that old game of telephone when it comes to your vendor communication plan. You know, the one where you keep emailing purchases and corrections back-and-forth because you’re still not 100% what’s in stock and what isn’t.
Remember the inventory forecast pitfall? This is where it comes back to bite you in the… profit. Miscommunication can also fuel these issues. Depending on your vendor’s volume and delivery times together with the flexibility of your cash flow, you can easily end up out of money AND understocked.
A vendor communication plan depends on your ability to be transparent and accurate with your inventory levels. Your vendors will also appreciate regular reports and forecasts. Why? Because it will help them gauge your orders better and, perhaps, offer better prices and delivery times.
6. One solution to rule all your fire and security inventory management pitfalls!
It’s pretty obvious now that you’re here, but there is one simple solution to all these fire and security inventory management pitfalls: automation. Implementing software might not sound like the easiest thing but it’s the only way to tackle all these challenges and many others that come with big contracts (planned preventative maintenance, mass scheduling, etc.).
Make sure the software you choose has a multi-location feature. This way, you can continue to use it even as you outgrow individual storage units. If the software comes with a warehouse app for asset tracking, and detailed picking lists, you’re looking at the following benefits:
Enhanced stockroom workflows that allow you to create automated processes (e.g. when a part is low in stock, the software can send purchase orders straight to the vendor). This eliminates understocking.
Reduce excess stock through efficient inventory control where techs can raise purchase orders when they know a part is out of stock.
Streamline parts returns so that they don’t end up misplaced or damaged, thus draining your resources.
If you understand these 5 inventory management challenges, you’ll see that automation can help with each and every one. More than a simple gimmick, fire and security software can easily put you in the big leagues.
Soon enough, you’ll leave the competition far behind. In the meantime, make sure to download our free guide if you’d like to take some of the knowledge home!
Hi! I'm Cristina Maria
And I want to bring next-level strategies to the field service industry. When I'm not working on the best tips to grow your business, I'm on the lookout for a sci-fi novel to beat The Foundation.