To succeed in today’s competitive service landscape, field service organizations need to be able to track inventory and understand their inventory valuation for maximum efficiency and profitability. Service providers also need a way to establish and maintain appropriate inventory levels for equipment, supplies, and parts to increase inventory turns, maintain cash flow, and reduce overhead.
Technology enables successful inventory management
Technology, and specifically an enterprise resource planning (ERP) solution designed for field service providers, provides visibility and control over inventory operations. The right ERP solution makes it possible to factor in complex variables such as warehouse and truck stock, technician usage, and inventory turns. The benefits of using an ERP solution with advanced inventory management features include improved service efficiency, reduced overhead in terms of warehouse labor and costs, efficient demand and order management, and improved cash flow.
In spite of all these benefits, 43% of small businesses in the U.S. don’t track inventory or do so using a manual method like pen and paper. This means reacting to inventory depletion by reordering when equipment, supplies, and parts are out of stock. When this process isn’t driven by an organized method of keeping accurate records, knowing what, when, and how much to stock becomes a guessing game. A lack of visibility into inventory operations introduces significant risk for field service organizations. They have no ability to answer questions of employee error, fraud, logistics problems, and unfulfilled shipments. Ineffective processes ultimately drive hard-working businesses out of business.
Conversely, effective, technology-driven inventory management improves all areas of a business, from the warehouse employees to the accounting department, to salespeople and service technicians, to executives and business owners. Here are some of the benefits your team could see with the right inventory management capabilities:
The Sales Team
Armed with laptops, tablets, and smartphones connected to your ERP system and inventory management module, your salespeople have real-time information to offer customers. They know what’s in stock, and whether it needs to be transferred from a warehouse or another location. They know what has to be ordered from vendors. They can provide an accurate timeline for delivery and installation to meet customer expectations. Today’s best-in-class field service organizations put a premium on providing exceptional customer service. All of this real-time information impacts proposals or quotes and enables you to quote competitively without cutting into profits.
Without accurate inventory data, your sales team runs the risk of losing important deals. For example, a customer orders a product through a sales representative, expects to receive it by a set date, and instead receives an email the next day saying the item is out of stock and will have to be backordered. The customer in this situation is driven to a competitor who can deliver a better experience based on clear expectations and a smooth sales process.
Inventory management as part of an ERP solution also empowers sales leaders with smart predictive capabilities and awareness of variable inventory levels caused by seasonal or fluctuating demands, product promotions, and business cycles. They can determine how much product will sell and when, so that sales and marketing campaigns can be structured to reduce mounting inventory.
Warehouse Inventory Manager
An ERP solution also gives you warehouse inventory manager and their staff visibility so they know what’s being sold and what’s being utilized in the field to place timely orders. Historical data collected in real-time enables your team to balance inventory levels to meet market demand while minimizing tied-up capital. The system maintains accurate inventory counts at all times, so even during peak seasons when inventory is turning quickly, you can make smart purchasing decisions. Conversely, holding excess stock, reordering equipment, supplies, and parts too early, or reordering them too late are each among the biggest overhead cost drivers for field service organizations. These are the inevitable consequences of manually managing your inventory records.
Field Service Technicians
Your technicians need the most effective tools at their fingertips to enable them to get the parts they need as quickly as possible. First time fix rates correspond to overall success for field service organizations, and not being able to close a service call because a technician has the wrong parts undermines the customer experience. The average first-time fix rate for a field service provider is between 75- 79%. Anything lower than a 50% first-time fix results in poor customer satisfaction scores that are difficult to reverse.
With a laptop, tablet, or smartphone, the ERP-equipped technician can source the parts needed from fellow technicians on the road, or from the warehouse, significantly improving efficiency in the field. They can also use the software to create follow-up repair visits and place orders for required parts. As soon as the part is received, the dispatcher is alerted and the technician can return to finish the job.
A mobile field service application is a giant step up from manual processes, but the bar has been set by the strongest competitors in every vertical of field service. In order to be competitive, your organization needs a completely integrated ERP solution to make smart decisions, manage costs, and provide an exceptional customer experience. Cloud-based business management software that integrates all business data and makes it easily accessible and usable across all business functions offers the insight needed to balance inventory levels, predict purchasing trends, increase productivity, and gain true total business insight.