Most inventory-management software allows staff to check stock while away from the office through a portable computer. Photo courtesy of Davis Business Solutions Inc.
Deciding when (or if) to purchase inventory-management software is a decision facing many small-business owners today. HVAC contractors are no exception.

If you don't currently use such a system, you may wonder if your company has grown enough to need software to track supplies, or if workers will be able to maintain the system once it is in place. Although inventory systems are designed to make life easier, some small contractors worry productivity - and profits - will suffer.

You don't have to be a multimillion-dollar company with hundreds of thousands of dollars in merchandise to benefit from an inventory-management system. No matter their size, all companies should create one. Organization is the key: an organized warehouse, organized procedures and organized personnel.

A successful inventory-management system uses:

    A successful inventory-management system uses:

    • The computer as an organizational tool

    • A warehouse organized for success

    • It gives inventory control to the inventory-control manager.

      The computer as an organizational tool

      Customers' expectations have dramatically changed. Today, they expect to know immediately if you have what they want in stock. They ask when their orders are shipping and if you'll have the materials to fix their repair or perform their job.

      Many customers expect to view transactions and their account status online. That's impossible without inventory-management software. If your company has a Web site or plans to eventually conduct business on the World Wide Web, an inventory-management system is the critical to future growth.

      Arranged for success

      Create specific locations for all merchandise. Invest in good shelving and bin systems that allow parts to be easily identified and located. If you keep a lot of small items on hand, see-through containers may make viewing them easier.

      Dedicate an area to receive shipments. All merchandise coming into the warehouse should come in through a single point. It ensures that goods are inspected for damage and verified before being shelved or shipped. This area should contain your bar-coding printer and a work station for record keeping.

      Ensure installers and field technicians return materials to stock. This is the warehouse manager's responsibility, not the field technicians'. The field tech should identify parts and what job they came back from; however, it is the warehouse manager's job to check them in and verify them. This process can be streamlined with bar-coded slips and double-stick labels on merchandise.

      When technicians or installers use materials in the field, they simply peel off half the label and place it onto the job ticket or field-service order. This makes billing easier and allows technicians to return parts to the warehouse to be put away.

      Give inventory control to the inventory-control manager

      Use a purchasing system. Even if you don't have a purchase-tracking system yet, plan for one. Make sure you have procedures to receive and ship goods. Tracking what comes in is the first step in knowing what's going out.

      Manage your inventory so that you can "control" it. Company officials often confuse controlling inventory with managing it. Make sure that you have the tools available to you in your software so that you can review purchases, track costs and make educated inventory decisions.

      Make sure your inventory-control manager truly has "control." Look at the physical setup of your warehouse. Limit the number of entrances to it. Give warehouse managers the ability to determine who has access to the warehouse. That means limiting service technicians, dispatchers, job supervisors and others from the warehouse. If warehouse managers have control over who is in the warehouse, they have control over what is in warehouse.

      Make warehouse managers accountable for stock-and-inventory accuracy. Make it tied to their salary. It's the easiest way to ensure the job gets done correctly.

      Expect your inventory-management system to change over time. Don't be afraid to re-evaluate procedures that aren't working. Before you discard a system, however, make sure the reason it's not working is the process, not because employees won't use it. Sometimes it takes management standing behind a policy for employees to realize it's here to stay.

      (Jennifer L. Davis is vice president of Davis Business Solutions Inc., an East Dundee, Ill.-based manufacturer of distribution software for contractors.)