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Top 5 Inventory Management Challenges in the Solar Industry
Excess inventory is a liability, even more so in the renewable or solar industry. We have identified the top 5 most common inventory management challenges specific to the renewable or solar industry.
These challenges are made more urgent by the rapid rise in innovation in recent years. Significant advancements happen in solar panel technology every new year, helping improve their energy storage capabilities and efficiency. Also, inverters and batteries are becoming cheaper and smarter.
Therefore, having out-of-date equipment in your warehouse means it continues to depreciate, and offloading it will be a challenge, even if you offer significant discounts. It’s no secret that solar energy customers want nothing but the latest technology.
Inadequate inventory can hurt too. If you are low on stock or even stock out for multiple installations, this could impede productivity. You’ll also face unhappy customers.
The following are the 5 most common inventory management challenges faced by companies in the solar and renewable sectors:
Challenge #1: Limited Inventory Visibility
Many solar companies experience difficulties identifying or locating products in their inventory. In fact, not many even know what stock they have or don’t have in their warehouses. Such situations make it difficult to fulfill orders. The result is unhappy customers.
This limited inventory visibility also leads to inaccurate, incomplete, or delayed shipments. Your crew will miss critical equipment to complete installation, impacting your reputation and bottom line.
Challenge #2: Manual Documentation
As mentioned earlier, most companies in the renewable industry are yet to digitize. That means they still document their orders and inventory manually in Google or Excel worksheets, on a whiteboard, or by email. However, this stunts the distribution of data and limits potential.
Your Operations and Maintenance team cannot know what’s available or what’s not available to complete solar installation and maintenance.
Does it also mean that your Asset managers have to move from one location to another recording the solar panels out there? And what happens when a customer no longer wants your solar services? Manual documentation makes this difficult because establishing where all your tangible assets are is hard. It’s time consuming and daunting. In fact, Asset Managers dealing with manual documentation often look disorganized.
Challenge #3: Identifying Incorrectly Located Parts
Lack of a digitized system or a centralized inventory hub to track equipment or products in-store is the main cause of incorrectly located parts.
Often, it takes the Operations and Maintenance team a lot of time searching for specific equipment needed for solar maintenance somewhere.
Often, it takes the Operations and Maintenance team a lot of time searching for specific equipment needed for solar maintenance somewhere. Sometimes such a search is unfruitful. The crew ends up picking the wrong material or equipment, delaying service and causing customer dissatisfaction.
Challenge #4: Inaccurate and Unknown Inventory Levels
Consider a scenario where your Operations and Maintenance team promises a customer that a particular inverter or battery is available, and you’ll have your crew install it the following day, only to find that the ordered item is unavailable in your warehouses.
You’re going to have an angry customer simply because you don’t have solar inventory management software that precisely indicates what you have or don’t have.
Remember, although most companies can afford to stock more, you can’t. The solar industry is evolving pretty fast, and you don’t want to find yourself with a warehouse full of obsolete equipment.
Also, solar products often experience times of rapid devaluation. Yes, it may help you meet customer demand at the very least. But it will cost you when you have to sell your panels at a loss.
Since you do most of the inventory for solar companies in the field, it’s easy to find your Asset Manager accounting for stock in warehouse floors without considering stock in transit.
Challenge #5: Changing Demand
Several external factors affect customers’ decisions to purchase. While some of these might be similar to other industries, others are unique to the renewable sector.
Even international, federal, and state incentives can shift market demands. Businesses and consumers tend to invest in solar products during months approaching incentive or rebate expiration dates. They prefer to switch when the government incentive is likely to be highest.
Failure to prepare for such changes due to improper management can strain your tracking. Your asset managers cannot predict a rise in demand and advise you accordingly on the equipment to invest in at such times?
At the same time, it puts pressure on the Operations & Maintenance team because they cannot keep up with competitors in the job sites.
Take your business to the next level with these best practices
Which of these 5 common challenges are present in your company? After identifying your top 5 solar company inventory challenges, the next step is to step up and improve.
First, identify your why’s and how’s. Then digitize your solar inventory management and bring all stakeholders on board. That way, your Asset Managers, and Operations and Maintenance can adhere to a gold standard on solar inventory management.
Here are seven solar inventory management best practices to guide you:
- Invest in solar inventory management that helps you collect, aggregate, and get insight into data from all your warehouse locations.
- Sort your inventory into categories. Most people prefer the ABC categorization method.
- Reorganize your warehouse layout for maximum efficiency. For example, it should take the least time possible for an employee to get a battery or inverter.
- Practice demand/inventory forecasting. It’ll help you be ready in advance.
- Automate everything you possibly can.
- Have an auditing strategy in place, especially for your assets.
- Maximize inventory turnover. It helps increase profitability.
Choose Ventory to Help with Your Solar Inventory Challenges
It’s time you abandoned your manual (undigitized) inventory with all its challenges and switched to a modern solar inventory management solution. Ventory is a powerful solution that you can deploy to manage solar inventory in the field anywhere within a day.
With Ventory, visibility is no longer a problem. It offers the following solutions:
- Real-time inventory visibility
- Optimized inventory levels with minimal waste and stockouts.
- Improved demand forecasting and replenishment.
- Increased collaboration between your field crew and staff.
- Harmonized logistics and procurement processes across different locations
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