Are your shelves full of products you don’t know when you’ll use - or if you ever will use? If you don’t come up with a method for advanced inventory management, you’ll end up leaving profits on the shelves, costing your business countless dollars in the long run.

How well commercial integrators manage their warehouses is directly related to their cash flow. It’s a balancing act. Integrators must be able to access products for jobs as the needs arise, but they must also avoid floating the cost of stocking products for long periods of time.

At Chicago-based A/V and videoconferencing systems integrator United Visual, the more on the shelf, the worse things are likely going for the company during that period, says CEO Daniel Newman.

“It’s important to have as little on the shelf as possible,” he says. “We don’t stock anything.” That’s not entirely true, Newman adds quickly, saying United Visual does have a stock room with wires, cables and plates, representing “a small, yet usable, supply for the unexpected.”

Photos: Tips for Better Inventory Management

United Visual has strong relationships with several manufacturers, including Anixter and Liberty Wire and Cable, says Newman, meaning local pickup is often an option in cases of emergency. Typically, though, the company prefers to have supplies a few days ahead to be able to stage the job before beginning the installation.

“You have to think about economic issues,” Newman says. “We never schedule anything hard until we have everything in-house, although we always hold tentative dates for jobs. If you go out with a piece or two missing, you can go from making a profit on a job to losing money.”

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United Visual is making a transition to Net Suite, a web-based customer relationship manager (CRM), Newman says, because “we really need all our systems to be talking to each other.” The program went live in April and was to be rolled out fully over the next few months. Newman envisions “significant savings and efficiencies” for his company as a result of the new system, particularly in accounting.

“You have to be careful of what I call ‘accidental shrinkage,’” Newman says, referring to not accounting for materials leaving the warehouse. Moving forward, United Visual will use a full scan-based system that will track when products are removed from inventory.

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D. Craig MacCormack

Craig MacCormack is a veteran journalist with more than 15 years experience covering local and national news and sports as well as architecture and engineering. He joined Commercial Integrator in January 2011. Follow him on Twitter: @CraigMacCormack.

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