Hidden Effects of Stockout
“Stockout”, for any manufacturing company can harm the completion of orders to customers, delay production targets, etc. It can have an impact on the manufacturing company’s operations and profits. A stockout can be a result of an unexpected rise in demand, and poor inventory management. If the issues linger on for more time, it can have an immense impact on the company. However, with the features of SAP Business One ERP, you can completely take care that such a scenario does not come along.
Let’s take a look at some of the consequences resulting from a stockout:
- There can be a delay in fulfillment of the customers’ orders and, in such a competitive scenario, the customers can look for the product from your competitors and can also leave negative feedback for your company which can further create a loss of reputation and loss of repeat clients.
- Stockouts can result in loss of revenue, this might seem obvious but when you consider the efforts and costs of getting back to the lost customer or acquisition of a new client, you can understand those stockouts can be extremely costly.
- If there is a lack of proper planning or the company lacks the modern infrastructure, stockouts can happen, SAP Business One provides plans, where you can have the best inventory management methods and data, which is available on the stock levels, in real-time, and in a matter of minutes.
- Lack of proper planning can also lead to the wrong estimation of demand for the products and the management can order a higher quantity of products that sells a lesser and lower quantity of products which is a best seller.
- Back Ordering can further increase your costs as the service professionals will have to amend the order and also shipping charges will be applicable.
- A stockout can also result in higher freight charges which the company will have to bear so that the item reaches the customer.
Although all the scenarios can’t be covered, however, one must make an effort to reduce the number of times a stockout can occur. SAP Business One improves the planning process and makes the inventory management, operations, and planning activities of the company much more efficient. SoftCore Solutions, an SAP Gold Partner in Ahmedabad has been in the ERP software sector for the last 20 years. We have helped numerous small and medium enterprises with the implementation of SAP Business One, a world-class ERP software that helps companies in streamlining and integrating various processes and thereby improving the performance and profitability of the company.