Inventory management is something that every business owner should be concerned about.
Getting your products to your customers on time is the lifeblood of your business. Keeping track of your inventory and managing it effectively also helps you meet demand and generate sales and shows proper inventory Management.
In this post, We’ll go over some of the most common inventory management issues—and how to overcome them. Read on to find out more.
20 Common Inventory Issues
- Inconsistent Tracking: Manual inventory tracking procedures across multiple software and spreadsheets are time-consuming, redundant, and prone to errors. A centralized inventory tracking system with accounting features can benefit even small businesses.
- Warehouse Efficiency: Inventory management controls at the warehouse are labor-intensive and involve several steps, including receiving and putaway, picking, packing, and shipping. The challenge is to complete all of these tasks as efficiently as possible.
- Inaccurate Data: You must know exactly what inventory you have at any given time. The days of counting inventory once a year with all hands on deck are long gone.
- Customer Demand is Constantly Shifting: Keeping too much of something can lead to obsolete inventory that you can’t sell while keeping too little can leave you unable to fulfill customer orders. Ordering strategies for core items, as well as technology for creating and executing an inventory plan, can help compensate for fluctuating demand.
- Limited Visibility: When your inventory is difficult to identify or locate in the warehouse, it leads to incomplete, inaccurate, or delayed shipments. Receiving and locating the correct inventory is critical to efficient warehouse operations and positive customer experiences.
- Manual Inventory Management: Managing inventory with paperwork and manual processes is time-consuming and insecure. It also does not easily scale across multiple warehouses with a large amount of stock.
- Problem Stock: Specialized care and storage plans are required for perishable and fragile stock. Furthermore, high-value inventory necessitates specialized loss-prevention strategies and inventory controls.
- The complexity of the Supply Chain: Global supply chains shift on a daily basis, putting a strain on inventory planning and management operations. Manufacturers and wholesale distributors who determine when, where, and how your inventory is shipped require flexibility and have unpredictable lead times.
- Warehouse Space Management: Managing space effectively is a daunting task. Using inventory management platforms to plan and design warehouse spaces allows you to better control the timing of new stock deliveries. It can take into account critical factors such as available space. Learn more about the distinctions between warehouse and inventory management.
- Improper Order Management: One of the most common obstacles to good inventory management is avoiding overselling and running out of inventory. You can accurately predict customer orders by using historical and seasonal data trends.
- Rising Competition: Globalized supply chains are vulnerable to unpredictability in economic shifts and market forces that affect raw material competition. Small businesses must sometimes choose between competing for high-demand materials and maintaining adequate inventory to control costs.
- Packaging Evolution: Compostable packaging—or eliminating packaging entirely—to reduce waste creates new challenges for warehouse design and storage. It may even imply purchasing new equipment or reducing the shelf life of some items.
- Product Portfolio Expansion: Many e-commerce strategies eliminate the need for large warehouse distribution centers. These strategies facilitate inventory expansion and product portfolio diversification, but they necessitate technology and resources for ordering, shipping, and tracking.
- Overstocking: Having too much stock on hand can be just as dangerous as having too little. Overstock has an impact on business cash flow and causes inventory-related issues such as storage and loss.
- Inventory Depletion: Inventory loss due to spoilage, damage, or theft can be a supply chain issue. It necessitates the identification, tracking, and measurement of problem areas.
- Inadequate Production Planning: Production planning is critical for avoiding manufacturing delays and cost overruns. If not done correctly, it can have an impact on sales forecasts and project schedules.
- Inadequate Knowledge: It can be difficult to find skilled inventory managers who are familiar with cutting-edge technology and can improve inventory strategy. Simply adding new features to your inventory management platform isn’t enough. You must have capable management.
- Ineffective Communication: Communication and collaboration are essential. When departments are unwilling to share information, identifying inventory trends and finding ways to improve becomes much more difficult.
- Processes that are inefficient: When inventory is small and there is only one warehouse location to manage, low-tech, manual inventory management procedures do not appear to be a daunting challenge. However, as sales volume and inventory grow, inefficient, labor-intensive, and low-tech standard operating procedures become difficult to scale.
- Insufficient Software: Inventory management software must integrate with your existing business process platforms in order to scale to support complex logistics. Choosing from hundreds of inventory management solutions and mastering a slew of features that necessitate training and ongoing support is a difficult task.
20 Solutions to Inventory Management Issues
- Tracking in one place: Consider upgrading to tracking software that includes automated re-ordering and procurement features. Inventory management platforms offer centralized, cloud-based databases for accurate, automated inventory updates as well as real-time data backup.
- Transparent Results: To overcome warehouse inefficiencies, measure and report warehouse performance metrics such as inventory turnover, customer satisfaction, and order processing speed. Share this information with your employees and suppliers.
- Stock Inspection: Stock auditing processes, such as daily cycle counting, reduce human error and provide more accurate, up-to-date inventory data for cash flow management. For more accurate financial data, organize audits by category and cycle count smaller inventory samples on a predictable schedule.
- Demand Forecasting: Some inventory management platforms include demand forecasting tools. This feature integrates with accounting and sales data to help you predict demand and schedule orders based on shifting customer preferences, material availability, or seasonal trends.
- Add Imagery: Add images with product descriptions in your inventory database to improve purchasing and receiving processes, enhance accuracy and prevent misplaced inventory.
- Go Paperless: Give employees the right inventory tools for the job. They need software to replace manual inventory documentation and paperless transactions for invoices and purchase orders.
- Preventive Measures: Implement stock control systems to manage problematic inventory such as perishable goods, fragile equipment, or obsolete materials. If the manufacturer requires it, perform regular preventive maintenance on machinery and equipment stock in storage. To monitor shelf life and prevent waste, catalog data on problem stock location, cost, and quantity.
- Service Level Metrics: Supplier data, such as shipment errors, damaged or defective products, and missed delivery appointments, should be monitored and tracked. Measure the performance of your suppliers to identify and resolve supply chain disruptions, reduce complexity, and streamline logistics.
- Optimize Your Space: To optimize storage space and inventory flow, use inventory management systems with warehouse management features. Automate order picking, packing, and shipping workflows by categorizing inventory storage down to the shelf, bin, and compartment level.
- Reorders can be automated: Backordered inventory causes delays in production and poor customer experiences. To avoid overselling, use inventory management software to set automatic reorder points based on pre-defined stock levels and current availability.
- Safety Stock: Maintain safety stock to compensate for supply chain disruptions and to help manage increased lead times caused by shifting international raw material competition. Proper inventory planning assists operations in adapting to changing global supply chains.
- Sort Inventory: Create inventory classifications to manage changing trends, such as plastic waste reduction packaging initiatives. Sort stock by packaging type, size, and product. Use this data to better control shipping costs and storage location.
- Warehousing at Multiple Locations: To track and control expanding inventories, use multi-location warehouse management features. Take advantage of receiving and put-away schedules with automated inventory tracking alerts and scheduling features that track warehouse location and in-transit inventory.
- Utilize Lead Times: When placing orders for high-demand stock, consider lead times. Using cycle counting data to set automatic reorder points and average lead time to prevent stockouts, you can track and manage your high-demand inventory.
- Lower Human Error: To prevent human error, inventory manipulation, and shrinkage due to theft or negligence, use inventory control processes such as blind receiving with barcodes and mobile scanners.
- Demand Planning: To prioritize your top inventory, use an inventory management system with advanced demand forecasting and reporting features. Consider the availability of the top 20% of inventory, which generates 80% of your customer demand. Read our essential inventory planning guide to learn more about inventory planning and demand forecasting.
- Expertise in Subcontracting: Consider hiring an inventory management expert. Contract for in-person training and provide online support to assist employees in adhering to best practices when working with technical inventory management software features.
- Collaboration on the Dashboard: Introduce dashboards with simple interfaces that display inventory data in real-time. Having everything on one screen facilitates communication between accounting, sales, and warehouse operations.
- Productivity Aids: All of the inventory information you require can be found in your pocket. You can control inventory and improve warehouse productivity from anywhere in the world using mobile solutions and cloud-based software.
- Platforms for updates: Upgrading to a cloud-based inventory management platform provides more than just the most recent features. You can benefit from the vendor’s expertise and training while it is being implemented. The right inventory management platform can streamline processes, improve inventory management, and improve customer satisfaction.
BrandDrive provides a suite of inventory management and control features to assist in overcoming some of the most difficult inventory management challenges. With BrandDrive, you can Track inventory in multiple locations and on the go, manage reorder automatically, forecast demand, and plan production and distribution.