One of the benefits realized by companies using Field Service Management software is the reduction of shrinkage. Greater control of supplies and inventory is a valuable feature for businesses that results in greater profitability.
How Does Software Help?
A feature within the software is the ability to track inventory received and used in customer installations. This tracking and reconciliation of inventory benefits the field service company in several ways:
- Prevents loss
- Improves profitability
- Reduces administrative efforts
- Enhances operational efficiency
- Gives technicians a clear way to account for inventory.
What is Shrinkage?
- Shrinkage describes the loss of inventory due to circumstances such as theft and administrative error.
- The difference between the recorded inventory and the actual inventory is measured by shrinkage.
- Shrinkage results in a loss of profits due to inventory bought but not able to be sold.
Inventory can be lost due to a number of reasons, causing a discrepancy between the book or expected inventory and the physical inventory – along with the associated value. The difference between these two inventory types is shrinkage.
What Is the Impact of Shrinkage?
The biggest impact of shrinkage is its drag on profits. If a company loses inventory through shrinkage, the cost of the inventory can not be recovered since it is impossible to sell the part to the customer. In addition, there can be considerable effort trying to reconcile the missing parts and obtain replacements. All of this adds up to wasted time. And it leads to a decrease in earnings.
Reputational damage is a result of shrinkage, too. The occurrence of shrinkage becomes known to associates and the communication service provider. As a result, this can tarnish the status of the company.
Using Field Service Management software gives companies an ability to reduce shrinkage. Improved business results are realized with technology in the form of greater:
- Operational efficiency
- Customer satisfaction