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9 Common Inventory Control Problems—and Solutions

Published on: December 07, 2021

in: Company News, Manufacturing Solutions

Inventory control problems are a normal part of business, but it seems as if lately, many global issues are compounding them. NBC News reported in October 2021 that retailers are struggling due to inventory shortages of common shipping and packaging materials: plastic, paper, cardboard. With many ports in the United States backed up due to labor shortages and global pandemic woes, retailers are finding shortages of popular items an all-too common phenomenon.

Although inventory shortages due to manufacturing shutdowns in various ports abroad cannot be helped, retailers, wholesalers, and others who rely upon these goods for commerce can take many steps to avert disastrous inventory control problems. Indeed, the following 9 inventory control problems can almost always be avoided with the right approach, including cloud ERP software.

9 Inventory Control Challenges

It is likely that merchants throughout time have had inventory control challenges. No matter how one plans for demand, supply may lag, demand may vanish, or both.

But given modern technology’s ability to predict, forecast, and see inventory levels, the right software can address many, if not all, of the following inventory control challenges.

  1. Supply chain complexity
  2. Changing demand
  3. Challenging stock
  4. Inaccurate data
  5. Manual stock taking and documentation
  6. Managing warehouse space
  7. Poor order management
  8. Lack of experienced staff
  9. Miscommunications

1. Supply chain complexity

We live in an interconnected world. A problem halfway around the world six months ago can lead to stock shortages now. Natural disasters, labor disputes and strikes, political unrest, and more can lead to supply chain issues—so, too, can the complexity of the modern supply chain. Raw materials may come from one continent, ship to another for fabrication into parts, and then ship to a third destination for assembly into complex items. Items like computer motherboards and batteries require raw materials from several areas, complex manufacturing and fabrication facilities, packaging, and then shipping to their final destination.

Such a complex supply chain requires careful management and clear visibility. If one delay can have a domino effect months down the line, it makes sense to have a solution that offers excellent inventory control and supply chain visibility throughout the system.

2. Changing demand

Manufacturers try to predict demand several seasons out to ensure they produce adequate goods for shipment. Unfortunately, changing demand means that many must shift abruptly into new products—not so easily done when machinery needs to be reconfigured and new raw materials need to arrive.

Changing demand puts a lot of pressure on inventory control, too. When goods sell quickly, it’s natural to react by ordering more. But what if it’s only a temporary rise in demand? What if demand falls just as quickly as it rose?

When demand changes quickly, it’s more important than ever to have good inventory control measures in place. Such measures can prevent overstocks or frustrating shortages.

3. Challenging stock

Another area where good inventory control measures are essential is when a warehouse must manage challenging stock items. This is especially important in process industries, pharmaceutical, and food and beverage manufacturing and distribution where temperature control, stock rotation, and aging or dated stock must be managed carefully.

Inventory control in these industries doesn’t just mean keeping track of how many of each item is in stock. It also means recording and monitoring things like temperature, expiration date, and other conditions that can affect the quality and safety of the goods sold. Records kept for these industries must be accurate, timely, and easily viewed to satisfy customers and regulators.

4. Inaccurate data

Disconnected systems, manual stock taking, and outdated software can all lead to inaccurate warehouse data as can poorly managed warehouses. If returns back up or receiving isn’t handled promptly, inventory control data can become outdated. All of this leads to frustrated staff, angry customers, and wasted time and money.

5. Manual stock taking and documentation

Are you still counting your inventory and documenting stock counts using printed lists? The old clipboard and count method was outdated 20 years ago, never mind today. One of the worst mistakes you can make with your inventory control is to rely on manual documentation of stock counts. Newer barcode scanning software that works in conjunction with any handheld device (like your smartphone or tablet) makes automated stock counts a breeze. Another advantage is that the data from barcode scanners automatically flows into ERP systems. If you’re using cloud ERP, that data can also flow throughout the company’s systems, including the website.

6. Managing warehouse space            

Managing warehouse space is integral to effective inventory control. A well-designed warehouse offers easy access to popular items to reduce picking and packing times. Good lighting, well-organized bins and shelves, and automating as much of the warehouse as possible leads to better inventory control and faster processing of orders.

7. Poor order management

Poor order management is a problem that often hides behind complaints—complaints from customers that orders are late and complaints from sales that items are out of stock. Keeping items in stock to keep pace with orders is an artform, but one made much easier with software and systems that facilitate inventory control.

8. Lack of experienced staff

Inventory control isn’t something you can delegate to an inexperienced temp. Good inventory specialists are worth their weight in gold. If your company lacks experienced inventory managers, it’s time to start the search for the right candidate. Having someone with experience at the helm can make a huge difference in all aspects of inventory and warehouse management. An experienced inventory manager keeps the orders shipping, knows the importance of preventing a backup at the receiving area, and ensures accurate and timely data. They can improve customer service and satisfaction and make a big difference to your company’s bottom line.

9. Miscommunication

“But the warehouse manager said we have plenty of widgets in stock and I just accepted an order for 10,000. How can we be out of them?”

Along with accurate and timely data, nothing is more important for inventory control and management than clear communication. Miscommunication can lead to dissatisfaction, over orders, and a host of easily prevented problems.

One way to avoid miscommunication is to automate as much as possible. Instead of relying on someone’s interpretation of a situation, you can rely on the data provided by the warehouse system and ERP to ensure clear, accurate communication regarding inventory levels, shipping, stock, and more.

ERP Software Prevents Many Common Inventory Control Challenges

Most, if not all, of the common challenges listed above can be solved with the right inventory control methods, experienced personnel, and cloud ERP software. Cloud ERP software, along with warehouse management systems, offers exceptional visibility into all aspects of warehouse and inventory management.

With the right cloud ERP system, you can:

  1. Receive immediate, real-time information on inventory levels from all warehouse locations
  2. Deliver accurate information to sales personnel, whether they are in the office or working remotely, traveling, or visiting customers
  3. Provide up-to-the minute order status and stock information through your website with integrated e-commerce and ERP systems
  4. Create and build sales projections using historical data to better manage and control inventory levels
  5. Find customer and order information, delivery information, and supply chain updates from an interconnected web of cloud-based systems
  6. View stock counts and inventory levels in real time
  7. Improve ordering accuracy and shipping times
  8. Offer customers better service and information about their orders
  9. Manage warehouses more efficiently

But how do you choose the best cloud ERP system for your inventory control and warehouse management needs?

First, download Mindover’s free white paper, Better Inventory Management, to learn more about best practices for inventory management, control, and warehouse management. Read our popular blog, 5 Tips for Improving Your Supply Chain Management.

Next, explore cloud-based ERP on our website. Acumatica offers flexible cloud ERP systems that integrate seamlessly with barcode scanning software such as distribution and warehouse management systems and e-commerce solutions.

With the unprecedented disruptions to the global supply chain that companies have experienced recently, it makes sense to ensure the best systems are in place. Cloud-based ERP and inventory control systems offer a way to improve service, deliverability, transparency, and profitability for any company involved in the sales and distribution of goods. Rise above the challenges, use the best software available, and overcome these problems.