Irrigation business inventory management often makes sense for large companies. But, is it necessary for smaller irrigation and sprinkler repair companies?
“Do you think it is necessary for me to keep up with the inventory of my irrigation parts? Do I need a system in place to manage my inventory?”
Even though there is software that manages inventory, such as QuickBooks, my general take on this is that inventory management for small sprinkler repair companies is generally not necessary as it over complicates the business.
A lot of the reason for that opinion is just seeing what goes on within our own business. Likewise, through Service Autopilot, because we have so many clients in the industry, what I’ve seen with most companies that manage inventory or implement an inventory management system, is they end up making tons of adjusting entries and get very little in the way of hard data from their inventory management system.
For example, something happens, the inventory is off by some amount. Nobody knows exactly why, so they make an adjusting entry. A little time goes by and inventory’s off again. You talk to the tech and he doesn’t know and just figures he used it on a job. You like the tech and trust the tech. What do you do? You don’t make him pay for the inventory. You don’t fire him. You make an adjusting entry.
More often than not, what I see is, a lot of companies making tons of adjusting entries and therefore, the inventory management is near worthless because you’re not using it to measure anything. You’re not using it to penalize anybody and it’s not giving you the information to know if anybody is stealing from you because you still never know.
You may have hunches, but you can’t prove them, and you don’t want to fire that guy because he’s really important. That’s one side of it.
The second side of it is, it’s so easy to get caught up in all the little stuff in the business. Irrigation is a great example. There’s so many T’s and elbows and so many things involved. How in the world can you possibly track all that stuff? If you want to track inventory, then what I would essentially do is instead of having a whole inventory management system, why not have some type of a system within your office or your warehouse that protects the high dollar stuff. When it’s needed in a job, you hand it out. You just keep the higher dollar stuff locked up somewhere in a locker or something and keep track of the high dollar parts. That’s one angle.
What is the point of inventory management if you don’t hold someone accountable, if you don’t make business decisions with the resulting reports?
My opinion is inventory tracking and inventory management is good, but few companies have the time to execute properly so it is an unnecessary expense and a time distraction.
It’s just one more thing for you to think about and obsess over and it takes mental capacity. My point is, I generally think it’s not worth maintaining an inventory system especially for smaller companies. Instead, put in some different types of procedures to protect the inventory, but know you’re going to have some loss and try as long as you can to avoid having to put a whole big technology system in place for it.
