The U.S. economy is on the upswing, but a huge amount of cash is still tied up in inventory. American businesses have yet to get on the inventory management boat, leading to errors, lost opportunity, and increased costs.
These ten statistics show just how inventory management is being overlooked in the US.
1. A shocking amount of capital is tied up in inventory. Inventory along with accounts receivable and accounts payable has tied up $1.1 trillion in cash – equivalent to 7% of the U.S. GDP. (Source: REL) >> Tweet this
2. While inventory as a percentage of sales is down from its highs, it’s on the rise from its 2011 low. U.S. retailers are currently sitting on about $1.43 in inventory for every $1 of sales they make. (Source: Stifel via SCDigest) >>Tweet this
4. Even though shipping and manufacturing are getting more efficient and faster, companies are still holding on to more stuff. “Days inventory outstanding” – the amount of inventory on hand based on average sales per day – has risen 8.3% over the past five years. The highest sector is spirits, at 188 and the lowest is restaurants at 7. (Source: REL via SCDigest) >>Tweet this
5. Warehouse space is still dirt cheap, compared to other buildings. The average cost per square foot of warehouse and distribution centers in the U.S. is $5.08. (Source: Colliers International) >>Tweet this
6. More and more businesses are increasing the range of products they stock in order to meet consumer “long tail” demands. 54% of warehouses plan to expand the number of inventory SKUs carried over the next five years. (Source: Motorola) >>Tweet this
8. Almost everyone understands the value of working with mobile devices to increase speed and operational efficiency. 67% of warehouses plan to use mobile devices to manage inventory. (Source: Motorola) >>Tweet this
9. The value of inventory tracking isn’t just in dollars and cents. Using barcodes on medication reduced errors in administration by 41.4% at an academic medical center. (Source: New England Journal of Medicine) >>Tweet this
10. Inventory and warehouse management is increasing in value and relevance. The number of warehouses in the U.S. has risen 6.8% over the last five years. (Source: Bureau of Labor Statistics) >>Tweet this
The move away from pen-and-paper inventory management is a huge step toward success. With the growth of RFID systems and alternative inventory management programs, companies are able to take their inventory processes back.
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