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15+ Inventory Management Challenges & Their Solutions

What are common challenges in inventory management? This post will show you different inventory management challenges and their solutions. The lifeline of your company is getting your products to the customers on time. And staying on top of the inventory and handling it efficiently helps you satisfy demand and produce sales. We’ll walk through a few of the common inventory management obstacles– and how to conquer them. To get more information, read our inventory management post.

15+ Inventory Management Challenges & Their Solutions

inventory management

Managing inventory is a daunting task. The process and results impact every element of your company. To help, here are quite 20 common inventory management difficulties to look for in your supply chain.

1.Inconsistent Tracking:

Using manual inventory tracking treatments throughout different software and spreadsheets is time-consuming, redundant and susceptible to errors. Even small businesses can gain from a centralized inventory tracking system that includes accounting features.

2.Warehouse Efficiency:

Inventory management controls at the storage facility is labor-intensive and includes a number of actions, consisting of getting and putaway, selecting, packaging and shipping. The challenge is to perform all these tasks in the most effective way possible.

3.Inaccurate Data:

You require to understand, at any given minute, exactly what the inventory you have. Gone are the days when the inventory could be counted once a year with an all-hands-on-deck method.

4.Changing Demand:

Client need is constantly shifting. Keeping excessive could lead to obsolete inventory you’re not able to sell, while keeping too little could leave you unable to satisfy client orders. Order methods for core items, as well as innovation to develop and execute an inventory strategy, can assist compensate for changing demand.

5.Restricted Visibility:

When your inventory is hard to recognize or find in the warehouse, it results in incomplete, inaccurate or delayed deliveries. Getting and finding the best stock is essential to efficient storage facility operations and favorable client experiences.

6.Manual Documentation:

Managing inventory with paperwork and manual procedures is tedious and not secure. And it does not easily scale across numerous warehouses with great deals of stock.

7.Problem Stock:

Disposable and delicate stock need specialized prepare for care and storage. And the high-value inventory needs specific loss-prevention strategies and inventory controls.

8.Supply Chain Complexity:

Worldwide supply chains shift daily, putting a burden on your inventory preparation and management operations. The makers and wholesale suppliers that determine when, where and how your inventory ships require flexibility and deal unforeseeable lead times. Check out this article on Best Sales Productivity Tools to run business efficiently.

9.Managing Warehouse Space:

Efficiently managing area is an intimidating task. Planning and developing storage facility spaces with inventory management platforms assists you much better control the timing of brand-new stock shipments. It can represent important factors, such as readily available space. Learn more about the differences between warehouse management and inventory management.

10.Insufficient Order Management:

One of the most common obstacles to sound inventory management is avoiding the overselling of products and running out of inventory. Utilizing historic and seasonal information trends can help you properly predict customer orders.

11.Increasing Competition:

Globalized supply chains go through unpredictable financial shifts and market forces that impact the competitors for basic materials. Small companies are sometimes faced with selecting in between contending for high-demand products or holding adequate inventory to manage costs.

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12.Developing Packaging:

Compostable packaging– or eliminating packaging all together– to reduce waste presents brand-new barriers for storage facility style and storage. It might even imply new equipment or much shorter shelf life for some items.

13.Expanding Product Portfolios:

Many online retail methods eliminate the need for big storage facility warehouse. These strategies make it easier to expand the inventory and diversify product portfolios, however need innovation and resources for ordering, shipping and tracking.


Keeping excessive stock on hand can be as troublesome as having insufficient. Overstock effects business capital and results in inventory-related issues, such as the storage and loss.

15.Inventory Loss:

The loss of inventory due to the spoilage, damage or theft can be a supply chain problem. It requires determining, tracking and determining issue locations.

16.Poor Production Planning:

Production planning is vital for preventing postponed manufacturing and expense overruns. If not succeeded, it can impact sales forecasts and job scheduling.

17.Absence of Expertise:

It can be tough to discover experienced inventory supervisors who are proficient at the current technology and can improve inventory technique. Merely upgrading your inventory management platform with a host of functions isn’t enough. You need capable management. Check out this amazing article on Best Sales Tools to Grow Revenue Quickly.

18.Poor Communication:

Communication and partnership are essential. When departments are apathetic about sharing details, it makes recognizing inventory patterns and discovering methods to enhance a lot more difficult.

19.Ineffective Processes:

Low-tech, manual inventory management procedures don’t appear like an overwhelming challenge when inventory is small and there’s only one warehouse place to handle. But as sales volume boosts and inventory expands, ineffective, labor-intensive and low-tech standard operating procedures are hard to scale.

20.Inadequate Software:

To scale the inventory management software to support complex logistics, it requires to integrate with your existing organization procedure platforms. The difficult task is choosing from hundreds of inventory management solutions and mastering a host of functions that need training and ongoing support.

10+ Solutions to Overcome Inventory Management Challenges

inventory management

Inventory management is profoundly complex. Here are some options to the typical inventory management difficulties listed above.

1.Central Tracking:

Think about upgrading to tracking software application that provides automated functions for re-ordering and procurement. Inventory management platforms offer central, cloud-based databases for precise, automatic inventory updates and real-time data backup.

2.Transparent Performance:

Measure and report warehouse efficiency metrics like inventory turnover, client complete satisfaction and order processing speed to overcome warehouse inadequacies. Share this information with staff members and providers.

3.Stock Auditing:

Regular stock auditing procedures, like day-to-day cycle counting, lower human error and supply more precise, updated inventory data for handling capital. Arrange audits by classification and cycle count smaller inventory samples on a predictable schedule for more accurate financial information.

4.Demand Forecasting:

Some inventory management platforms include need forecasting tools. This function incorporates with accounting and sales data to assist you forecast demand and schedule orders based upon shifting consumer preferences, material availability or seasonal trends.

5.Include Imagery:

Add images with product descriptions in your inventory database to enhance getting and getting processes, improve accuracy and prevent misplaced inventory.

6.Go Paperless:

Give staff members the ideal inventory tools for the task. They require software to change manual inventory documentation, and paperless deals for billings and purchase orders.

7.Preventive Control:

Carry out stock control systems to handle issue inventory, such as disposable stock, delicate equipment or obsolete materials. Perform regular preventive maintenance on equipment and equipment stock in storage if required by the manufacturer. Catalog data on issue stock area, cost and amount to keep track of life span and avoid waste.

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8.Procedure Service Levels:

Screen and track provider data, such as delivery errors, damaged or faulty products and missed shipment consultations. Procedure your supplier’s performance to discover and fix supply chain disruptions, reduce intricacy and streamline logistics.

9.Optimize Space:

Usage inventory management systems with warehouse management features to enhance storage space and inventory flow. Classify inventory storage down to shelf, bin and compartment, and automate order selecting, packaging and shipping workflows.

10.Automate Reorders:

Backordered inventory delays production and creates poor client experiences. Use inventory management software application to set automated reorder points based on pre-programmed stock levels and current schedule to prevent overselling.

11.Security Stock:

Maintain security stock to offset supply chain disturbances and help manage increased preparations due to shifting worldwide competitors for raw materials. Appropriate inventory preparation assists operations adjust to vibrant international supply chains.

12.Categorize Inventory:

Develop inventory classifications to manage altering trends, such as product packaging initiatives to reduce plastic waste. Categorize stock by product packaging type, dimensions and item. Use this info to manage shipping costs and storage place much better.

13.Multi-Location Warehousing:

Usage multi-location warehouse management includes to track and control broadening stocks. Benefit from getting and put-away schedules with automated inventory tracking informs and scheduling functions that keep tabs on warehouse place and in-transit inventory.

14.Leverage Lead Times:

Take lead times into account when positioning orders for high-demand stock. Track and handle your high-demand inventory utilizing cycle counting data to set automatic reorder points and typical preparation to preventing stockouts.

15.Minimize Human Error:

Use inventory control procedures like blind getting with barcodes and mobile scanners to prevent human error, inventory adjustment and shrinking due to theft or neglect.

16.Plan Demand:

Use an inventory management system with innovative demand forecasting and reporting functions to prioritize your leading inventory. Take into consideration the accessibility of the top 20% of inventory that generates 80% of your client need. To read more about inventory planning and demand forecasting, read our essential guide to inventory planning.

17.Subcontract Expertise:

Consider contracting out to a specialist in inventory management. Agreement in-person training and provide online assistance to help staff members follow finest practices for dealing with technical inventory management software functions.

18.Control panel Collaboration:

Introduce control panels with simple user interfaces that show real-time inventory data. Having everything on one screen assists eliminate interaction barriers throughout accounting, sales and storage facility operations.

19.Performance Tools:

All the info you need about your inventory can be in your pocket. With mobile solutions and cloud-based software, you can manage inventory and enhance your warehouse efficiency from throughout the world.

20.Update Platforms:

Upgrading to a cloud-based inventory management platform does not simply offer all the latest functions. You get to make the most of the supplier’s know-how and training while it’s being carried out. Check out this article on Best Sales Tool to Increase Revenue. 

Summary of Inventory Management Challenges and Solutions

Utilize this quick-reference chart to review typical inventory management challenges and suggestions for how to overcome them.

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Challenges & Solutions

Irregular Tracking 

Centralize your tracking data with a cloud-based inventory management option with real-time data backup and automated inventory updates.

Warehouse Efficiency 

Measure and report storage facility performance metrics– such as inventory turnover, client satisfaction and order processing speed– to improve storage facility inefficiencies.

Unreliable Data

Schedule regular stock auditing like everyday cycle counting of various stock classifications in small, workable batches.

Changing Demand

Integrate inventory management software application and need forecasting features with your accounting and sales data to determine necessary inventory.

Inventory Visibility

Add images with item descriptions in your inventory database to enhance accuracy and avoid lost inventory.

Manual Documentation

Replace handbook inventory documentation, invoice and purchase order procedures with software that creates paperless records and automates information input.

Problem Stock

Catalog data on issue stock, such as place, cost and quantity. This will help you keep track of life span and prevent waste.

Supply Chain Complexity

Monitor and track provider performance to prevent supply chain disruptions, minimize complexity and streamline logistics.

Storage facility Space

Categorize inventory storage down to shelf, bin and compartment and automate order selecting, packaging and shipping workflows.

Insufficient Order Management

Use inventory management software to set automatic reorder points for inventory based on pre-programmed stock levels and current availability to prevent overselling.

Increasing Global Competition

Maintain security stock to offset supply chain disturbances and manage increased preparations due to moving global competition for raw materials.

Progressing Packaging

Create inventory categories to classify stock by packaging type, measurements and item. Use this info to control shipping expenses and storage location.

Broadening Product Portfolios

Improve receiving and putaway schedules with automated inventory tracking informs and scheduling functions that keep tabs on storage facility area and in-transit inventory.


Track and handle your high-demand inventory using cycle counting information to set automatic reorder points and optimize deliveries by typical preparation. Check out this article on Best Sales Tools to Boost Business Growth.

Inventory Loss

Use inventory control processes like blind getting with barcodes and mobile scanners to prevent human error, inventory control and shrinkage due to theft or negligence.

Poor Production Planning

Track and handle the accessibility of the leading 20% of the inventory that generates 80% of the demand utilizing an inventory management system with sophisticated demand forecasting and reporting features.

Absence of Expertise

Outsource to an inventory management professional. Usage in-person training and online assistance agreements to help staff members find out best practices for dealing with specialized inventory management software application functions.

Poor Communication

Introduce incorporated control panels with real-time inventory data and a basic user interface to communicate and handle workflows throughout accounting, sales and warehouse operations.

Ineffective Processes

Leverage item location scanning and barcode technology (or RFID tagging), mobile devices and cloud-based software to increase storage facility performance and enhance inventory control efficiency.

Insufficient Software

Adopt an integrated, cloud-based inventory management platform and utilize supplier expertise and training services at execution.

Conquer Challenges With Inventory Management Software

The ideal inventory management platform can automate procedures, enhance inventory practices and boost client experiences. NetSuite offers a collection of native inventory management and control functions to assist get rid of some of the most significant inventory management obstacles. Track inventory across numerous places, immediately handle reorder points, forecast demand and strategy production and distribution.


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