Top 7 Inventory Management Challenges & Solutions
Some of the common challenges of inventory management are
- Limited visibility to inventory
- Inefficient inventory management process
- Identifying Incorrectly located material
- Tracking obsolete mater
- Keeping up with Overstocks
- Managing inventory waste and defects
- Lack of centralized inventory hub
The above said aren’t the only challenges, but I have named a few. In fact, if you’re looking for a specific solution to inventory management, you have considered the material flow from procurement to disposal.
To begin with, the first step to overcome the challenges is by identifying them. There are two ways you can approach this scenario:
(I) Try different solutions for each challenge, or
(2) Try a one-stop complete solution for all the challenges.
I’d recommend the latter as when you set out for the first one, you have to integrate data acquired from different software to multiple databases using third-party tools and this might again be time-consuming, expensive, and backbreaking. However, on the other hand, a comprehensive solution will have all specialized features to integrate the different processes to databases without any discomfort.
Now, let’s start with how to address the above-stated challenges.
Challenge #1: Limited visibility to inventory
Think about difficulties in locating or identifying stocks in your inventory – you won’t be able to ship the stock on time and this might impact your business’ reputation. An incomplete, inaccurate and hard-to-find inventory can only impact your business bottom-line.
Solution: Real-time inventory management system
By implementing a real-time inventory management system on your premise, you will not only be able to locate the stocks instantly but also will have the complete location data and stock availability with 100% accuracy. Having such accurate and complete inventory will improve your customer satisfaction by leaps and bounds.
SEE ALSO: "Top Asset Tracking Methods"
Challenge #2: Inefficient inventory management process
Managing a huge inventory with manual paper-based procedures will do no good for your business growth. As the sales volume will soar and inventory will expand, lack of digitization and inefficient inventory management process only produce dismal results.
Solution: IoT inventory management solution
An IoT-enabled inventory management system will help your warehouse staff manage stocks efficiently and track them once they enter till they leave your premise. Having an inventory management system will streamline the process, help you with real-time data and improve your inventory efficiency significantly.
Challenge #3: Tracking obsolete material
This scenario often happens in almost all companies. Not every product/material will be sold and there would be few materials that are obsolete for some time and over a period of time, the materials will be abandoned by the inventory managers. However, when the need arises again, most of them fail to recognize and utilize obsolete materials and go for the new ones. This leads to an increase in expenses and wastage of the material.
Solution: Stock control system
The application helps a lot in finding the dead inventory or obsolete materials to identify the stocks and utilize them properly and wisely. With such a system in place, the app will help the inventory managers to control the stocks.
Challenge #4: Identifying incorrectly located materials
The prime reason for this challenge is the lack of a system in place to track in-store products/equipment. Most often, finding a specific product for sales from the inventory eats up lots of time of the workforce and it is extremely hard to find a product among 1000s stocked. Picking a material incorrectly not only delays the sales but also impacts customer satisfaction.
Solution: In-store product finder
Tagging each and every product with a laser-etched QR-code or RFID tag or barcode will help the workforce identify any product of many. All the staff has to do is have a scanner. An indication lamp will be on once the scanner meets the respective product. The staff can easily find the product and pass it on to the sales team. This saves a lot of time and improves the sales cycle, customer satisfaction.
Challenge #5: Keeping up with overstocks
Buying materials without selling the existing can hurt your business profit significantly. This challenge arises due to poor stock control and management by managers. When performed manually, a few materials will not be accounted for, and buying the same materials again will bring down the profit.
Solution: Stock auditing system
With a stock auditing system in place, the inventory managers can perform regular stock audits to identify the used and unused stocks to improve inventory efficiency. In this way, your enterprise would be able to save time and money and drive profit.
Challenge #6: Managing inventory waste & defects
Maintaining a healthy inventory is significant for delivering the stocks on time. Defective inventory and waste due to non-standard procedures of untrained operators. The costs associated with inventory waste and defects are massive and often lead to unhappy customers.
Solution: Modern inventory management software
With well-established inventory management software, your business can manage inventory seamlessly. Streamlined procedures and processes will make the job of the staff simple at the same time help the company to manage staff efficiently.
Challenge #7: Lack of centralized inventory hub
Having inventories in different locations can be extremely tough for stocktaking. The discrete data about the stocks from different locations make it even tougher during shipments and most often results in delayed shipping. This is one of the persistent challenges most enterprises face today.
Solution: Centralized single inventory hub system
Setting up a digitized and centralized single inventory hub system for your stock keeping and taking will help your business a lot to cut down costs and time. As you have complete control over your inventory and its data in a single place, tracking and managing the stocks entering and leaving the enterprise premise is simple and effective.
Summary
Rather than going with different solutions for each process, having a comprehensive solution with all the features will help your business reduce material wastage and achieve improved efficiency through complete inventory management.
Looking for a one-stop solution to overcome your pressing inventory management challenges? Try a state-of-the-art inventory management solution to leverage the benefits of your inventory to the fullest. It’s now or never.
