Why is Traceability Important?
Companies are constantly looking for opportunities to increase profit per order. What is the most efficient way to do this? Product traceability allows organizations to accurately track and monitor their inventory and business functions throughout their supply chains.
Item-Level Traceability Helps Identify Loss
CEDIA, the international trade association and central touchpoint for 3,700 member companies representing the technology market, conducted an industry study to find out the extent of loss or misplacement of inventory items by installers. The study’s eye-opening findings indicate that most installers working in the technology industry agree that on an annual basis, installers typically lose or misplace approximately 6% to 10% of their inventory and assets.
For a business owner, this inventory loss can equate to a staggering $12,000 or more in lost revenue (profit) per vehicle/installer per year. Taking this a step further, sing CEDIA’s metrics, and considering that a typical company has four to six employees/contractors, installations could potentially cost companies $48,000 to $72,000 per year in billable inventory. This doesn’t even include the cost of the time and effort required to find, replace or manage the unpaid inventory at client’s locations. What prevents this? Identifying loss through item level traceability.
In order to reduce inventory loss, it is necessary to add an inventory management system with traceability. Inventory loss can exist throughout a company’s supply chain, and includes all items, consumables and tools. Item-level traceability can reduce inventory loss, since it provides detailed information on where each individual item is at all times, along with who touches it. Common inventory modules, or add-ons used by traditional financial software and proposal management platforms, do not deliver itemized inventory data or traceability analytics for accurate inventory control.