solved problems on inventory management

20 Inventory Management Challenges and Solutions for 2022 and Beyond

The lifeblood of your business is getting your products to your customers on time. And staying on top of your inventory and managing it efficiently helps you meet demand and generate sales. We’ll walk through some of the common inventory management challenges—and how to overcome them. To learn more, read our inventory management article .

20 Common Inventory Management Challenges

Managing inventory is a daunting task. The process and results impact every aspect of your business. To help, here are 20 common inventory management challenges to watch for in your supply chain.

Inconsistent Tracking:

Using manual inventory tracking procedures across different software and spreadsheets is time-consuming, redundant and vulnerable to errors. Even small businesses can benefit from a centralized inventory tracking system that includes accounting features.

Warehouse Efficiency:

Inventory management controls at the warehouse is labor-intensive and involves several steps, including receiving and putaway, picking, packing and shipping. The challenge is to perform all these tasks in the most efficient way possible.

Inaccurate Data:

You need to know, at any given moment, exactly what inventory you have. Gone are the days when inventory could be counted once a year with an all-hands-on-deck approach.

Changing Demand:

Customer demand is constantly shifting. Keeping too much could result in obsolete inventory you’re unable to sell, while keeping too little could leave you unable to fulfill customer orders. Order strategies for core items, as well as technology to create and execute an inventory plan, can help compensate for changing demand.

Limited Visibility:

When your inventory is hard to identify or locate in the warehouse, it leads to incomplete, inaccurate or delayed shipments. Receiving and finding the right stock is vital to efficient warehouse operations and positive customer experiences.

Manual Documentation:

Managing inventory with paperwork and manual processes is tedious and not secure. And it doesn’t easily scale across multiple warehouses with lots of stock.

Problem Stock:

Perishable and fragile stock need specialized plans for care and storage. And high-value inventory needs specific loss-prevention strategies and inventory controls.

Supply Chain Complexity:

Global supply chains shift daily , placing a burden on your inventory planning and management operations. The manufacturers and wholesale distributors that dictate when, where and how your inventory ships require flexibility and offer unpredictable lead times.

Managing Warehouse Space:

Efficiently managing space is an intimidating task. Planning and designing warehouse spaces with inventory management platforms helps you better control the timing of new stock deliveries. It can account for important factors, such as available space. Read more about the differences between warehouse management and inventory management.

Insufficient Order Management:

One of the most common challenges to sound inventory management is preventing the overselling of products and running out of inventory. Using historical and seasonal data trends can help you accurately predict customer orders.

Increasing Competition:

Globalized supply chains are subject to unpredictable economic shifts and market forces that impact the competition for raw materials. Small businesses are sometimes faced with choosing between competing for high-demand materials or holding enough inventory to control costs.

Evolving Packaging:

Compostable packaging—or removing packaging all together—to reduce waste presents new obstacles for warehouse design and storage. It may even mean new equipment or shorter shelf life for some items.

Expanding Product Portfolios:

Many online retail strategies remove the need for large warehouse distribution centers. These strategies make it easier to expand inventory and diversify product portfolios, but demand technology and resources for ordering, shipping and tracking.

Overstocking:

Keeping too much stock on hand can be as problematic as having too little. Overstock impacts business cash flow and leads to inventory-related problems, such as storage and loss.

Inventory Loss:

The loss of inventory due to spoilage, damage or theft can be a supply chain problem. It requires identifying, tracking and measuring problem areas.

Poor Production Planning:

Production planning is vital for avoiding delayed manufacturing and cost overruns. If not done well, it can impact sales forecasts and project scheduling.

Lack of Expertise:

It can be tough to find skilled inventory managers who are adept at the latest technology and can improve inventory strategy. Simply upgrading your inventory management platform with a host of features isn’t enough. You need capable management.

Poor Communication:

Communication and collaboration are key. When departments are apathetic about sharing information, it makes identifying inventory trends and finding ways to improve much more difficult.

Inefficient Processes:

Low-tech, manual inventory management procedures don’t seem like a daunting challenge when inventory is small and there’s only one warehouse location to manage. But as sales volume increases and inventory expands, inefficient, labor-intensive and low-tech standard operating procedures are difficult to scale.

Inadequate Software:

To scale inventory management software to support complex logistics, it needs to integrate with your existing business process platforms. The difficult task is choosing from hundreds of inventory management solutions and mastering a host of features that require training and ongoing support.

Award Winning Cloud Inventory

20 Solutions to Overcome Inventory Management Challenges

Inventory management is immensely complex. Here are some solutions to the common inventory management challenges listed above.

Centralized Tracking:

Consider upgrading to tracking software that provides automated features for re-ordering and procurement. Inventory management platforms provide centralized, cloud-based databases for accurate, automatic inventory updates and real-time data backup.

Transparent Performance:

Measure and report warehouse performance metrics like inventory turnover, customer satisfaction and order processing speed to overcome warehouse inefficiencies. Share this data with employees and suppliers. 

Stock Auditing:

Frequent stock auditing processes, like daily cycle counting, reduce human error and provide more accurate, up-to-date inventory data for managing cash flow . Organize audits by category and cycle count smaller inventory samples on a predictable schedule for more accurate financial data.

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 Control:

Implement stock control systems to manage problem inventory, such as perishable stock, fragile equipment or obsolete materials. Perform regular preventive maintenance on machinery and equipment stock in storage if required by the manufacturer. Catalog data on problem stock location, cost and quantity to monitor shelf life and prevent waste.

Measure Service Levels:

Monitor and track supplier data, such as shipment errors, damaged or defective products and missed delivery appointments. Measure your supplier’s performance to find and fix supply chain disruptions , reduce complexity and streamline logistics.

Optimize Space:

Use inventory management systems with warehouse management features to optimize storage space and inventory flow. Categorize inventory storage down to shelf, bin and compartment, and automate order picking, packing and shipping workflows.

Automate Reorders:

Backordered inventory delays production and creates poor customer experiences. Use inventory management software to set automatic reorder points based on preset stock levels and current availability to avoid overselling.

Safety Stock:

Maintain safety stock to offset supply chain disruptions and help manage increased lead times due to shifting international competition for raw materials. Proper inventory planning helps operations adapt to dynamic global supply chains.

Classify Inventory:

Create inventory classifications to manage changing trends, such as packaging initiatives to reduce plastic waste. Categorize stock by packaging type, dimensions and product. Use this information to control shipping costs and storage location better.

Multi-Location Warehousing:

Use multi-location warehouse management features to track and control expanding inventories. Take advantage of receiving and put-away schedules with automated inventory tracking alerts and scheduling features that keep tabs on warehouse location and in-transit inventory .

Leverage Lead Times:

Take lead times into account when placing orders for high-demand stock. Track and manage your high-demand inventory using cycle counting data to set automatic reorder points and average lead time to preventing stockouts .

Reduce Human Error:

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

Plan Demand:

Use an inventory management system with advanced demand forecasting and reporting features to prioritize your top inventory. Take into account the availability of the top 20% of inventory that generates 80% of your customer demand. To learn more about inventory planning and demand forecasting, read our essential guide to inventory planning .  

Subcontract Expertise:

Consider outsourcing to an expert in inventory management. Contract in-person training and provide online support to help employees follow best practices for working with technical inventory management software features.

Dashboard Collaboration:

Introduce dashboards with simple interfaces that show real-time inventory data. Having everything on one screen helps remove communication barriers across accounting, sales and warehouse operations.

Productivity Tools:

All the information you need about your inventory can be in your pocket. With mobile solutions and cloud-based software, you can control inventory and improve your warehouse productivity from anywhere in the world.  

Update Platforms:

Upgrading to a cloud-based inventory management platform doesn’t just give all the latest features. You get to take advantage of the vendor’s expertise and training while it’s being implemented.

Summary of Inventory Management Challenges and Solutions

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

Inventory Management

Overcome Challenges With Inventory Management Software

The right inventory management platform can automate processes, improve inventory practices and enhance customer experiences. NetSuite offers a collection of native inventory management and control features to help overcome some of the biggest inventory management challenges. Track inventory across multiple locations, automatically manage reorder points, forecast demand and plan production and distribution.

Just-in-Time vs Just-in-Case: Choosing the Right Strategy

Just-in-time (JIT) and just-in-case (JIC) are on opposite ends of the inventory philosophy spectrum: One aims for lean operations, the other makes stockpiling a priority. Both are commonly employed in manufacturing and…

More On This

Trending Articles

Learn How NetSuite Can Streamline Your Business

NetSuite has packaged the experience gained from tens of thousands of worldwide deployments over two decades into a set of leading practices that pave a clear path to success and are proven to deliver rapid business value. With NetSuite, you go live in a predictable timeframe — smart, stepped implementations begin with sales and span the entire customer lifecycle, so there’s continuity from sales to services to support.

Before you go...

Discover the products that 37,000+ customers depend on to fuel their growth.

Before you go. Talk with our team or check out these resources.

Want to set up a chat later? Let us do the lifting.

NetSuite ERP

Explore what NetSuite ERP can do for you.

Business Guide

Complete Guide to Cloud ERP Implementation

7 Inventory Control Problems and How to Solve Them

Home -> Inventory Management -> 7 Inventory Control Problems and How to Solve Them

Inventory control can affect sales, budgets, customer satisfaction, and so much more. From being able to access inventory quickly to always having enough items in stock, inventory control is a complex topic. While you may have to make some mistakes on your own, you should try to avoid mistakes where you can. 

What is inventory control?

Inventory control refers to all aspects of managing your company’s stock levels and getting these products to customers as expected. The most important aspect of inventory control is ensuring accurate and sufficient stock levels in order to keep up with consumer demand. This process may be done in-house or through a third-party company such as a logistics provider or order fulfillment warehouse. The use of fully automated inventory control systems allows retail companies to successfully manage their inventory without costly mistakes or issues.

Why inventory control is important in business

Inventory control is one of the most important aspects of any products-based business. Failure to properly manage your inventory and successfully fulfill orders can lead to all sorts of costly issues and cut into your potential profits. Understanding how to manage your inventory and avoid inventory control problems is the key to your future business success and profitability.

Most Common Inventory Control Problems

While there are many things that can go wrong when it comes to inventory control, the most common problems that small businesses encounter are as follows.

• Understocking or overstocking : Understock and overstocking can both be costly mistakes. In some cases they are a result of negligence, while in other cases they may be a result of poor inventory control or cash flow restraints. Understocking most commonly results from cash flow challenges or supplier problems. Both of these issues can easily be fixed, but before you dive in make sure you are managing inventory properly and know exactly what you need. On the other hand, overstocking occurs when too much inventory is purchased. If you don’t have adequate inventory tracking systems in place it’s easy to overstock inventory on accident. The sooner you acknowledge that you’re overstocked, the better. Make efforts to liquidate some inventory or devise a plan for moving it. Overstocking and understocking can affect your bottom line through lost profits, tied-up cash flow, and missed sales. Utilizing a robust inventory management system in conjunction with analytics can help prevent these costly issues.
• Supply chain difficulties : Retail businesses are often at the mercy of their suppliers. Issues with your supply chain can lead to shipping delays, product shortages, the inability to fulfill orders, and other challenges to keeping up with consumer demand. These issues also affect customer satisfaction and can hurt your company’s reputation. It may sound scary to jump ship, but trying a new supplier may be necessary. Before switching, be sure to vet the new supplier. Asking to speak with current customers can be a great way to gather real insight.
• Inaccurate stock : You can’t sell a product that isn’t actually on your shelf. A lack of automation and lack of communication between your warehouse and your website can lead to mistakes in your inventory count and inaccurate stock levels. While it may require investment, having accurate real-time data helps you spot problems and keep customers happy.
• Demand complexity : There are many factors involved in proper inventory control. Businesses must remember to account for these factors including demand volatility, seasonal fluctuations, product life cycles, and supply chain complexities. These challenges can make it difficult to plan for and maintain the right amount of inventory.
• Lack of communication : If different departments of your business are not properly communicating with each other, you will be much more likely to encounter inventory control issues. For example, whoever is in charge of purchase decisions should be kept informed of every aspect of inventory management from the current state of the warehouse to any anticipated changes in market conditions or seasonal demand. The right technology can increase this visibility and cooperation between everyone involved.
• Lack of automation : If your company is still relying on paperwork and other manual systems, you may be missing a key opportunity to take your business to the next level. A lack of automation can be financially costly, take up too much time, lead to mistakes in data entry, and allow important information to fall through the cracks. On the other hand, the right inventory management system can allow key employees throughout the organization to stay informed and equipped with real-time (and accurate) data. A fully automated and integrated inventory management system is always the best choice.
• Lack of experienced staff : When you’re running a product-based business, it’s key that all employees involved in inventory management, logistics, and order fulfillment are experienced and trained. Having knowledgeable staff will help your company quickly identify any inventory control problems and prevent them from happening in the first place. On the other hand, inexperienced staff can lead to damaged goods, inaccurate data, and poor business decisions. Remember that staff is at the forefront of inventory issues. Hire individuals you trust and are competent, even if that means paying them more. Furthermore, meet with them regularly to find out what’s working and what’s not.

Tips for solving inventory control issues

Luckily, there are many things your business can do to stay on top of inventory management and avoid the most common inventory control problems. Consider these valuable tips below to help you maximize productivity and profits. 

• Consider outsourcing: Not all companies have the ability to manage their inventory themselves, especially small businesses who are just getting started. For these retail companies, hiring a third-party company who can expertly handle all of your logistics, inventory management, and order fulfillment can be a smart move. As an added bonus, leaving your inventory control to the experts frees you up to focus on other aspects of your business.
• Incorporate analytics : In order to avoid common inventory control issues such as understocking and overstocking, all of your business decisions should be data-driven. Utilizing consumer analytics and inventory management KPIs will help your company avoid these issues. The right data allows you to make informed business decisions, forecast for future demand, account for seasonality, track product sales cycles, and maintain accurate inventory levels. Companies should also have a solid understanding of their target customer and current market conditions.
• Incorporate technology : The use of automation, real-time inventory tracking software, and other technology can help your company stay on top of inventory control. Product visibility is extremely important to avoid understocking, overstocking, and inaccurate stock levels, so consider replacing any outdated systems with the latest solutions. Investing in the latest technology becomes even more important if you are managing your inventory remotely across several locations. Your inventory management system should be able to scale with your business, provide accurate information in real-time, and be accessible to employees throughout your organization anywhere in the world.
• Invest in employee training : The more skilled and knowledgeable your employees are, the more equipped your company will be to handle logistics, order fulfillment, analytics, forecasting, and inventory management. An investment in the continued education and training of your staff is never wasted.
• Keep up with trends: Industry knowledge is especially important for retail business owners. In order to make the best business decisions and avoid issues with your inventory levels, be sure to stay up to date with current market conditions and trends.

How Kickfurther can help

A lack of cash flow can hinder many retail companies from ordering the stock they need to remain both competitive and profitable. Kickfurther helps companies secure the funding they need for inventory. As the world’s first online funding platform that enables companies access to funds they are unable to acquire through traditional sources, we understand the struggles small business owners face. 

For companies that sell physical products or non-perishable consumables and have revenue between $150k to $15mm over the last 12 months, Kickfurther can help. We connect brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales. 

Kickfurther can help startups fund millions of dollars of inventory at costs up to 30% cheaper than the competition. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours. 

Inventory control is critical for profits, customer satisfaction, and all business operations. In business it’s easy to overlook a few problems, but remember, that one problem will turn into more. If financial restraints are the cause of inventory control issues, take charge. By utilizing inventory funding through Kickfurther combined with staffing the right people and implementing efficient inventory management systems, you can maximize the potential of your business.

Interested in getting funded at Kickfurther ? Here are 3 easy steps to get started:

#1. Create a free business account

#2. Complete the online application 

#3. Review a potential deal with one of our account reps & get funded in minutes

• Ecommerce 37
• Funding Solutions 10
• Import & Export Finance 13
• Inventory Financing 50
• Inventory Management 27
• Manufacturing 7
• Small Business 53
• Snowmelt 10
• Supply Chain 20
• Uncategorized 1

How much funding could your company raise?

Submit this form to see your estimate.

Amazon Seller Financing

Nail salon supply distributor financing, purchase order financing, shopify capital for financing, startup inventory financing, walmart inventory financing, e-commerce financing, ebay seller financing, warehouse inventory financing, food & beverage inventory financing, inventory finance for small business, wholesale inventory financing & loans, newegg inventory financing, supply chain financing, apparel brand financing, cosmetics & beauty financing, cbd business financing, pet store financing, retail business financing, sporting goods retail financing, revenue based financing, exercise & gym equipment financing, fragrance business financing, fashion accessories industry financing, hair care business inventory financing, supplier financing, home decor brand industry financing, mocktail mixes industry financing, healthcare business financing, coffee shop inventory financing, seasonal business industry financing, fashion jewelry inventory financing, business financing for technology companies, inventory financing for electronics brands, accounts receivable factoring, wellness center inventory financing, baby care product supplier financing, online grocery & foods retailer inventory financing, inventory financing for dropship businesses, inventory financing for women entrepreneurs, financing for furniture companies, medical supplier financing, dietary supplement business financing, previous post best inventory demand forecasting techniques, next post how much inventory should you carry, related posts.

Partner Directory

Screening Process

Privacy Policy

Terms of use

Stores Terms of Service

• Help Center

Report an issue

Subscribe to our newsletter

Sign up to get the latest news and updates.

Stay Connected

© 2024 Ouiby Inc. DBA Kickfurther

• How it Works
• Success Stories
• Distributors
• Marketplace
• Join Our Funding Marketplace

• +966 13 848 8080
• [email protected]
• Sun-Thu:9AM to 6PM

Top Inventory Management Challenges and How Best to Solve them

Inventory is the lifeblood of any business that deals with products, and it is vital that you manage it efficiently for business success and growth.

The challenges of inventory management are several.

The right solution can help you boost profitability and deliver outstanding customer service.

This is regardless of what the inventory location is – one warehouse or several; or even supplier drop-shipping.

Proper management of inventory helps cut costs, enhance cash flow, and ensure continuous production, and fulfilment of customer orders in time.

Partnering with a reputed service provider like Tranquil can mean the difference between chaos and seamlessness.

Staying on top of your inventory will allow you to generate sales , fulfil customer demands, and maintain business continuity.

Let us take a look at the most common inventory management problems and solutions .

ALSO READ: Common ERP Challenges in 2022

Common Inventory Management Problems and Solutions

1. lack of inventory visibility.

If you’re unable to locate or identify stocks in your inventory, shipping products on time becomes very difficult, and this can dent your business reputation.

Inventory that is incomplete, difficult to find, or erroneous, is sure to hamper your bottom line.

In fact, the most common reason for delayed, wrong, or partial shipments is the difficulty of locating or identifying inventory in the warehouse.

Receiving in finding the correct stock is critical for ensuring warehouse efficiency, as well as good experiences for the customer.

Solution: Real-time inventory management system

When you implement a real-time inventory management system like Tranquil ERP, you will have all the accurate details regarding location data, and stock availability.

This will help in the easy location of stocks, which ultimately translates to better order fulfilment and customer satisfaction.

ALSO READ: Pipeline Inventory and Decoupling Inventory

2. Inefficient Inventory Management Process or Software

This is probably the most common, and the biggest inventory challenges .

Many businesses still try to manage their inventory with manual procedures, or outdated legacy software – which may stunt your business growth.

It may not seem much of a bother to use manual, labor-intensive, or low-tech systems when you’re a small, one-warehouse business – but that will change when you expand.

When sales volumes balloon, you need to expand inventory and add warehouses.

Old and inefficient inventory management practices will be tough to scale, and prove to be a handicap, and not give you the results you need.

Manual inventory tracking procedures involve either paperwork or tracking procedures across multiple spreadsheets and software, which can lead to data redundancy, incomplete data, and a lot of time spent on it; it also provides less security.

In today’s competitive age, it is essential to know at any point in time, exactly what inventory you have; you can no longer rely on physically counting inventory annually using all your employees.

Another big problem is inventory loss caused by theft, damage, spoilage, and so on; this supply chain issue requires the ability to properly pinpoint, track, and measure the problem areas.

You can scale inventory management software and support complicated logistics, only when you are able to integrate it with your existing business software.

This cannot be achieved with outdated, legacy systems.

Solution: IoT-driven inventory management solution

ALSO READ: What are Backorders and How to Manage or Avoid Them?

An inventory management system that leverages IoT will empower your warehouse staff, and help them manage stocks and track them throughout their time in your warehouse efficiently, and quickly.

You can streamline your inventory management with the right solution, and enhance inventory efficiency.

It’s not just large corporations, but even small businesses that can benefit from a centralized inventory tracking system with integrated accounting features – all of which can be found in Tranquil ERP; it is robust, intuitive, economical, flexible, and scalable.

3. Tracking Obsolete Material

In almost every business, you are likely to face this problem at some time or the other.

There will be some products or materials that remain unsold or unused, and they may become obsolete, or past their expiry date.

These materials or products tend to accumulate over time as they are mostly ignored by inventory managers.

When that product or material is needed sometime in the future, unfortunately, the unsold stock stays forgotten, and new stock is purchased; the older one may remain in the warehouse for so long that it gets damaged completely.

This increases expenses, and material wastage.

Solution: Efficient stock control system

ALSO READ: What is Negative Inventory?

This feature is included in the Inventory management module of Tranquil ERP.

You will be able to locate the dead stock and make proper use of them.

Such a software solution can help inventory managers significantly in controlling stocks.

4. Identifying Incorrectly Located Materials

When there is no proper system to track products, materials, or equipment in the store, it can be cumbersome and time-consuming to find them when you have sales orders.

After all, a warehouse may typically store thousands of products. This can delay sales and make customers unhappy.

Solution : Product finder

All products that you have should be tagged with RFID , barcodes, or QR codes etched with a laser.

This will help your employees identify the products that are needed.

They only need to be equipped with a scanner. Once the scanner finds the required product, a lamp glows, indicating a match.

This helps your pickers to quickly find the product and send it to the sales agents, saving them time, speeding up the sales cycle, and making customers happy.

ALSO READ: Route and Van Sales – Challenges and Opportunities

5. Keeping up with Overstocks

When you purchase new materials with a few unsold products lying in your warehouse, it can affect your profitability.

This situation mostly arises due to the inefficiencies of manual processes, which causes poor control of stock.

Storing too much stock is as bad as storing too little, as overstocking hampers your cash flow and creates problems related to inventory, like storage, or loss.

Solution : Stock audit process

When you implement a stock audit process, inventory managers will be able to audit stocks regularly so that unused stocks are quickly identified.

This boosts the efficiency of inventory greatly, enabling your company to cut costs, eliminate delays, and enhance profitability.

6. Managing Inventory Waste & Defects

Though it may seem small, it is one of the most common and repetitive inventory management problems that can cause huge losses eventually.

To be able to fulfil orders in time, it is essential that you maintain optimal inventory.

Without standard procedures and untrained operators, you could end up with inventory that gets damaged or wasted – and this can not only prove to be very expensive but also lead to dissatisfied customers.

Solution : Modern inventory management software

Tranquil ERP has a robust inventory management module that enables you to manage and control your inventory efficiently.

With streamlining of procedures and processes, your employees will find it easy to perform their jobs, and you can cut costs and eliminate wastage.

ALSO READ: Guide on Procurement Challenges

7. Lack of Centralized Inventory Hub

Stocktaking becomes very challenging when you have inventories in multiple locations.

Discrete stock data from various locations makes shipping complex, resulting in delays.

It’s one of the biggest and continual challenges faced by most businesses today.

Solution : Central inventory system

You can significantly reduce expenses and save a great deal of time by simply creating a centralized inventory hub for your inventory-related data, including stock-taking.

This gives you comprehensive visibility and control of inventory and data in one single location, making stock management simple.

It also becomes much easier to track the inventory that enters and leaves your business premises.

8. Changing Demand

Consumer demand is in a constant state of flux; this makes storing inventory complicated.

How much to store? Too much, and you could end up with dead stock ; too little, and you won’t be able to fulfill customer demands.

Solution : Technology to Plan Inventory

What you need is robust inventory forecasting technology that takes into consideration all these factors, and helps you plan your inventory more efficiently.

Tranquil ERP’s inventory management module has the forecast feature that helps create and implement the optimal inventory plan.

This can help you to keep up with fluctuating customer demand.

ALSO READ: ERP Configuration vs. ERP Customization vs. ERP Personalization

9. Supply Chain Complexity

International supply chains are dynamic and can create roadblocks in the management and planning of your inventory.

Manufacturers and distributors are impacted by unforeseen economic booms and slumps which impact raw material prices and availability.

They also decide when, how, and where to ship the inventory – and this means you have lead times that you cannot predict, necessitating you to be much more flexible.

Solution : Robust Inventory Management application

With the right inventory management application implemented in your business, you can predict lead times as close to accuracy as possible, and be better prepared to handle supply chain complexities.

10. Managing Warehouse Space and Efficiency

One of the most challenging tasks for any business is the efficient management of space.

Warehouses need to be planned and designed with the help of inventory management platforms so that you can control when new stock is delivered, and help you make the best use of available space.

If you deal in fragile or perishable products, you need to arrange specialized care and storage – for example, cold storage.

You have to implement specific strategies for expensive inventory, to prevent theft and damage.

Warehouse inventory control is labor-intensive, and necessitates multiple steps like receiving the stocks, putting them away, picking inventory, packing, and finally, shipping.

It is critical that all of these tasks are executed as efficiently as possible.

ALSO READ: What is Business Process Improvement (BPI)?

Solution : Warehouse Management System

Inventory management modules either have warehouse management as a feature or are integrated with warehouse management modules.

This can help you automate many of the tedious tasks and bring in more efficiency in the entire warehouse management of your business.

11. Insufficient Order Management and Poor Production Planning:

Production planning is of critical importance if you don’t want to have a stoppage of production and cause budget overflows.

If you don’t plan it appropriately, your sales forecasts can go haywire, as can your project scheduling.

Thinking that there is sufficient stock, and overselling products is a common challenge faced by many businesses.

Solution : Production planning software

Production planning software makes use of seasonal trends, and historical data to make fairly accurate predictions that help you plan production better.

12. Lack of Expertise and Poor communication

While every business would love to have inventory managers who are excellent communicators and tech-savvy, taking to new technology easily, the truth is that it seldom happens that way.

Merely deploying the most feature-packed ERP system will not cut it if it’s not used properly.

Solution : Proper Training

From the outset, importance should be given to imparting proper training to all those who will use the new system.

It should be especially impressed upon the managers that they need to familiarize themselves with the new system properly.

The different department heads should also be told about the importance of collaboration and sharing data.

Disparate solutions for every process can cause confusion and improper data. A one-stop solution like Tranquil ERP can help you decrease wastage of materials, and attain more efficiencies in your inventory management , and across your organization. Tranquil is a robust, cutting-edge ERP solution deployed in the cloud that helps you maximize your inventory usage. Schedule a demo with us to know how our software works and how it can benefit your business.

• What is HCM and How Does it Differ from HRM?
• Why is ERP System For Automotive Industry Important?
• How Does ERP Deliver ROI for Business?
• How to Choose an ERP Software to Enhance your Purchase Management
• Detailed Guide on ERP in Production Planning
• Business tips
• HR & Payroll
• Small business
• General Trading
• Manufacturing
• Distribution
• Project Management

Request A Demo

7 Common Inventory Management Errors (And How to Avoid Them)

These costly mistakes will cut into your bottom line—but luckily they’re easy to avoid..

Inventory management errors may be costing your business more than you think. You might measure this cost in wasted time, frustration, or lost customers. But ultimately, it all boils down to financial losses that are easily avoidable with the right strategies in place.

In this article, we’ll dig into the most common inventory management errors faced by both traditional retailers and e-commerce businesses. We’ll also discuss strategies for avoiding these missteps so you can make the most of your inventory investment.

Why Inventory Management Errors Matter—A Lot

Are you managing your inventory, or is your inventory managing you? Sometimes it can feel like the latter when you don’t have a solid inventory management system in place, and it’s easy to see why. One simple error can cause a domino effect of consequences for your business.

Poorly managed inventory causes frustrations for customers, ranging from out-of-stock items to longer shipping times due to lack of product availability. It can also lead to overstocks, stockouts, and inefficient use of warehouse space during a time when industrial real estate is at a premium. 

In turn, these problems can have a ripple effect on your business. It may cause customers to shop elsewhere, meaning a loss in sales and eventually, a damaged brand reputation. That’s why it’s important to focus on avoiding common inventory management errors that hurt your bottom line.

On the flip side, the benefits of good inventory control and management include reduced costs and increased profits, improved stock availability, and faster fulfillment, all of which lead to happier customers.

The 7 Most Common Inventory Management Errors

These are the most common inventory management errors that businesses make—and odds are that if you’re making one of them, you’re probably making a few others as well. Many of these errors stem from the same root cause: a lack of solid systems for inventory management . That’s why many of these errors are interlinked with each other. The upside of this is that by tackling these core issues and following inventory management best practices , you’ll go a long way towards resolving most of these errors.

1. A Lack of Planning

There’s an old saying about planning: “If you fail to plan, you’re planning to fail.” That’s certainly the case with inventory management. If you don’t have a solid inventory management process in place, it can be difficult to anticipate customer demand or manage your stock levels correctly.

Without proper forecasting, you won’t know when certain products are running low or how much of each item to order. This can result in overstocking and stockouts, both of which mean lost sales and revenue.

How to Avoid It:

Make sure you have an up-to-date forecast that allows you to anticipate customer demand based on past and current product performance, then use this forecast to adjust your stock levels accordingly. Also, consider using tools like inventory optimization software or a supply chain visibility platform to help you better manage your inventory levels by measuring stock levels and product trends.

2. Foregoing Automation

Inventory management can be a daunting task, and manual processes are both time-consuming and prone to errors. Without automation, it’s nearly impossible to keep track of all your inventory with accuracy and efficiency.

Whether you have some haphazard automation in place or you’re still managing everything manually in Excel, you’re at risk of making costly mistakes by sleeping on the business-boosting benefits of automating your inventory management. These days, automation is a must for any business that wants to keep up with the competition.

Look into tools like inventory management software, demand planning software, and warehouse automation solutions to help you automate your entire inventory management process. You’ll be able to easily track stock levels, keep on top of ordering, identify up-and-coming trends in customer demand, and more. Automation can also help you identify and address issues more quickly so you don’t suffer the consequences of an inventory blunder for too long.

3. Poor Organization

Your warehouse should be organized and optimized for maximum efficiency. If it’s not, your inventory management is likely suffering. 

Unfortunately, a lack of organization is an issue that can easily snowball. It’s a little bit like a teenager with a messy bedroom—the more disorganized your warehouse is, the more disorganized it’s likely to be in the future if you don’t make any changes. And, the more likely you are to make costly mistakes with a warehouse in chaos.

Poor organization and poorly thought-out processes can cause inaccurate stock counts, lost items, incorrect location tracking, or even safety issues for warehouse employees. It can also lead to inefficiencies—for example, if your most popular item is stored high out of reach, it’s slowing down your order pickers. The longer you wait to get things in order, the more significant these errors will be. 

Implement an efficient warehouse organization system to make sure everything is in its proper place and easily found when needed. Investing in warehouse automation can also help improve organization and accuracy. With automated systems that track inventory, you’ll always know where things are located and how much of each item is in stock.

4. Unqualified Employees

Automation isn’t the answer to all of your inventory management problems. You’ll also need to make sure you have the right people on board; once they’re in place, it’s time to invest in training them.

Employees who aren’t properly trained in inventory management processes or systems can introduce costly errors into your inventory system. For example, they may not know how to use certain software correctly, resulting in incorrect data entry or inaccurate stock counts. Even with an intuitive inventory system, training is critical. Employees who feel confident on the job are also happier on the job, which means better performance.

Proper training is key to ensuring your employees can effectively manage and track inventory. Be sure to provide them with training in any automated systems you’re using, as well as regular refresher courses. Many software providers offer online resources, like how-to videos, blogs, tutorials, and other content . Take advantage of these ready-made resources to help your people improve performance. Additionally, make sure relevant staff are familiar with the processes related to ordering, stocking, tracking, and shipping inventory accurately and efficiently.

Depending on the size of your business, you may also want to consider hiring a dedicated inventory manager. With a firm grip on all of your inventory processes, hiring someone in this role can be a game-changer as you work to scale up your business and optimize your inventory management.

5. Under- and Over-Stocking Items

This may circle back to a failure to forecast, but it’s worth mentioning on its own. Both under-stocking and over-stocking items can have a big impact on your business. If you’re not stocking enough of an item, you could miss out on sales due to stockouts. On the other hand, if you’re stocking too much of something, it could lead to extra storage costs and wasted space in your warehouse.

Don’t just focus on the number of items you have in stock—you also need to make sure your inventory mix is balanced and that you’re carrying items that customers actually want. Jeff Bezos , who may know a thing or two about inventory management, encourages businesses to “determine what your customers need, and work backward.” 

Forecasting is key to avoiding overstocking and under-stocking items. Make sure you’re looking at historical sales data, inventory levels, current trends, customer demand, seasonality, and any other factors to establish reorder points. Consider investing in an inventory optimization tool or a supply chain visibility platform to help you gain more insight into your inventory so you can make smarter stocking decisions.

6. Lack of Performance Measurements

If you don’t have any performance measurements or auditing in place, it can be difficult to identify issues with your inventory management systems. Without these metrics, there’s really no way to tell if your processes are working as they should, or if there are any bottlenecks that need to be addressed—at least not until something disastrous happens.

Data is critical to any successful inventory management strategy, and without it, you won’t be able to make informed decisions or optimize your processes. There’s no such thing as too much information here.

Make sure you have the right KPIs in place so that you can assess the performance of your inventory management process. This could include everything from stock levels to on-time delivery percentages and more. Regular audits will help you ensure your processes are running smoothly and identify potential issues early on before they escalate into big problems for your business.

7. Poor Vendor Relationships

The relationships you have with your vendors can have a significant impact on the success of your inventory management process. After all, your vendors are the ones who ensure you have the right products at the right time for your customers. 

If you don’t have a good relationship with suppliers, it can result in delays in shipments and other issues that disrupt your inventory levels. Poor vendor relationships can also lead to higher costs; a lack of communication can make matters even worse, as you might not have sufficient notice about these issues, leaving you without a Plan B.

Make sure you’re selecting the right vendors and nurturing these relationships through effective supplier relationship management practices . Establish processes for regular communication and use tools like order tracking and electronic data interchange (EDI) to help keep everybody on the same page. 

How Inventory Management Software Can Help

While there are many different strategies you can use to improve your inventory management process, one of the best is investing in inventory management software . This business-boosting software can help automate many tedious warehouse and inventory tasks, reduce human error, and provide critical real-time visibility into your stock levels.

Inventory management systems can also make it easier to manage multiple warehouses or locations at once, as well as track orders and supply chain processes. Ultimately, you’ll be able to manage your inventory more effectively and ensure products are delivered to your customers on time. 

(Learn more about how inventory management software can optimize your business.)

The Bottom Line

Inventory management errors are costly. They lead to lost sales, dissatisfied customers, and wasted resources. Fortunately, there are several strategies you can use to minimize such errors and ensure your inventory processes run smoothly. These include investing in the right technology, providing proper training for employees, forecasting accurately, and nurturing collaborative relationships with vendors. 

Being proactive and tackling these issues head-on will create a more efficient inventory management process and ensure your business runs like a well-oiled machine.

If you’re interested in taking your inventory management strategy to the next level, get in touch . We will be happy to start you on your journey.

Andrew Page

• Agiliron News
• Cloud Computing
• Growing Your Business
• Industry Trends
• Infographics
• Uncategorized

Most Common Inventory Management Problems in 2024 (and Their Solutions)

• Better serve customers
• Optimize operations
• Stay competitive in an ever-changing marketplace

What is inventory management?

• Tracking inventory levels
• Monitoring product demand
• Replenishment

The supporting role of inventory data management

• Values of products held by a retailer

Common inventory management problems and solutions

Explore: 3 Expert Tips to Master Inventory Management for E-commerce

Inventory issues:

1. poor demand forecasting, 2. overstock.

• Excess inventory
• Takes up valuable warehouse space
• Ties up capital
• Obsolete or expired products
• Wasted resources.

3. Understock

4. poor visibility into inventory, 5. inefficient tracking and ordering systems, how to fix inventory problems.

Inventory solutions

1. improve your demand forecasts.

• Analyze large amounts of data
• Identify patterns in sales
• Makes predictions about future sales right down to the SKU level

2. Say goodbye to overstock

3. stop coming up short, 4. let there be sight.

• Sales trends
• Stock levels
• Product performance SKU-by-SKU

5. If you can track it, you can manage it

Apply innovative solutions to overcome inventory management challenges.

• Increase demand forecasting accuracy and efficiency
• Reduce inventory carrying costs from overstock
• Automatically replenish to avoid stockout
• Gain more visibility into your inventory management process
• Track inventory in real-time

Table of Contents

People Also Read

Putting an End to the $50B Overstock Problem with Advanced Analytics

Top 4 Strategies to Maximize Your Sales During A Recession (2024)

How to Win at Ecommerce Demand Forecasting in 2024

Looking to stay up to date on the latest in retail?

Get the latest in retail, artificial intelligence, and business by joining our newsletter.

• About Retalon
• Leadership Team

Connect With Us

• Toll Free : 1.888.837.0268
• Contact Us Online
• Request A Demo

Copyright ©2024 Retalon. All Rights Reserved.

• Toll Free 1800 309 8859 / +91 80 25638240

Home Business Guides Common Inventory Management Problems, Challenges, And Solutions

Common Inventory Management Problems, Challenges, And Solutions

Tally Solutions | Updated on: May 23, 2023

--> published date: | updated on: --> <--, top challenges in managing inventory, how inventory management software can help you overcome challenges.

Inventory management is an essential process in many different businesses ranging from retail sales to manufacturing industries. Good inventory management is crucial to the success of these businesses. Better inventory management improves cash flows and reduces expenses. Some inventory management problems are common across industries.

Visibility problems

When your inventory becomes hard to find, you have inventory visibility problems. Lack of visibility is one of the most common inventory management problems. Locating the correct item in the right place as quickly as possible is essential to inventory. If the hard to find inventory is part of the supply chain for manufacturing, it can impact the operations of the entire manufacturing process. If the inventory stock is being accessed for shipping and cannot be located, it leads to incomplete or wrong shipments and severely impacts customer satisfaction. Either way inventory visibility problems have a severe impact on the performance of the business and is one of the symptoms of poor inventory management.

Lack of real-time reporting

Inventory reports are essential to making decisions. An inventory department cannot summarise and report based on real-time inventory data when using a manual system. Reports on historical trends are also challenging to prepare quickly. When management cannot visualise inventory stock or trends, making informed decisions on purchase and inventory becomes tough. This directly affects the bottom line of the company.

Inefficiency

Managing inventory manually is a cumbersome and tedious process. Even the routine tasks become slower than they should be. As companies scale up, the process becomes more inefficient and slow. Manual inventory management becomes even more challenging to implement across multiple warehouse locations. Inefficient inventory management slows down operations. Inventory management problems that cause slow shipping of products leads to a fall in customer satisfaction. Even when software solutions are used, improperly designed or obsolete systems do nothing more than merely replicate the manual process of inventory management . Inefficiency and redundancy are some of the symptoms of poor inventory management.

Overstocking

Money that is spent on inventory gets locked in if the items are not used. Overstocking can impact the profitability of a business. This is because more stock is bought than being sold. Management of inventory to stock the correct quantity of items is essential to a company’s financial well-being. Overstocking also results in the buildup of obsolete stock. This is the material that has been bought or stocked in excess and is no longer in demand. In a manual system, this stock may be abandoned or forgotten. When it is in demand again, the company may buy more of it instead of using what is already stocked.

Understocking

Being understocked is also one of the inventory management problems. In manual systems, the flagging of materials that need to be reordered is dependent on the vigilance of the people managing inventory. When there is a slip-up, the company may find itself understocked to meet demand. In a supply chain, inventory management feeds the entire production process. Understocking can slow down production or even bring it to a halt. Not utilising the available warehouse space is also money wasted. Improper inventory management does not make the best use of all the available warehousing space that the company is paying for or bearing overheads on.

Lack Of trend forecasting

Trend forecasting is essential to managing a business. Projections and forecasts for inventory stocks are accurate when based on actual numbers and trends. Manual systems cannot quickly deliver summaries and reports. Inaccurate forecasting of trends could also lead to the company not anticipating seasonal rises and falls in demand. Lack of historical data to forecast trends is essential to avoid both overstocking and understocking.

Lack of centralization

Centralisation is not a problem in smaller businesses, with all their inventory stored in one location. As companies grow, they expand their inventory to different locations. Manual maintenance of inventory records makes it very difficult to communicate and access inventory data across locations. Manual reports and lists do not show the real-time stocks of inventory. Disconnected data is often a cause of delayed or incorrect shipping. It is also impossible for management to get an accurate real-time report on all their inventory across locations.

Improved visibility and transparency

Implementing an inventory management solution such as Tally helps you easily locate any item that is required. It also gives you complete data about the required item and its availability. Being able to locate inventory items improves the efficiency of the company. At the management level, the ability to visualize inventory helps in better decision making to streamline the process. Managers can easily visualise past trends and base their forecasts and planning on actual numbers.

Increased customer satisfaction

More transparency also allows the company to measure the efficiency of their inventory management. They can see how the stocks flow through the system and identify bottlenecks. In companies that ship to the customer directly from inventory, customer satisfaction based on shipping speeds can also be measured. Accuracy in identifying and shipping items will also enhance customer satisfaction.

Stock analysis in TallyPrime

Increase in productivity

Inventory management software improves the efficiency and productivity of all the personnel involved in inventory management. Any inventory items can be easily found without having to search manually. Scaling up operations does not cause inventory management problems when you use an inventory management system. Computerised inventory management also lets you go paperless if you want to.

Accuracy in recording and tracking inventories

Management of stock through inventory management software reduces human error and provides accurate and up to date data. A computerised inventory management system such as Tally lets you know exactly where your inventory items are. Inventory data is updated and accurate in real-time.

Easy to manage and track inventories

When you use an inventory management system such as Tally, you have a better handle and control over the stock levels. You can easily track items that are being unnecessarily stockpiled. Even if you have obsolete inventory, it is tracked by the system to avoid buying more of what you already have.

Get to know the fast-moving and high profitable inventories

When you can visualise and study the inventory movement and profit margins, it helps you identify fast moving items as well as items that fetch you a better profit margin.

Stock item-wise profitability analysis in TallyPrime

No worries of understocking and overstocking Of inventories

Inventory management shows you the items that are falling below the set reorder level. You can promptly order the required materials so that you do not fall short.

 Reorder Levels On TallyPrime

Insights from reports help you in on-time business decisions

The easy access to reports that analyse inventory over time also empowers the company to better forecast trends and manage inventory accordingly. Decision making in the company becomes fact driven.

Connectivity and centralisation

Management of inventory through an integrated solution such as Tally helps in the centralisation of the inventory data. It also allows the inventory data to flow seamlessly between locations. So, the system is quick and efficient even when something has to be shipped out of inventory across locations. Tally also helps monitor inventory in different storage areas. Inventory can be easily managed across different warehouses within the same location or across geographies.

Cost optimization at all level of inventories

Inventory management through software such as Tally is also a good cost control measure. Efficient inventory management prevents mishaps such as overstocking that locks up precious capital. Software enhances the productivity of inventory management and warehouse personnel. Software also lets you use your warehousing space optimally. Empty and unused warehouse space is a waste of money that can be prevented by properly visualising and locating stock.

Help you get rid of the risk Of old And expired Stock

Goods that sit in inventory too long are a waste of money too! Efficient inventory management helps you attain that perfect balance of inventory to reduce costs and increase profits.

Switch to a smart integrated business solution with inventory management such as Tally to make the most of your inventory and warehousing processes. It will make a big difference to the efficiency, productivity and profitability of your business.

• Inventory Planning: Basic Concept and Benefits
• Inventory Management Techniques: Process and Tools with Example

Tally Solutions | Sep-23-2021

• Business Guides
• ERP Software

Latest Blogs

Moving to New Financial Year

How to Create and Use Barcodes for Inventory Management with TallyPrime

5 Inventory Management Best Practices

Warehouse Inventory Management – A Complete Guide

Multi-Location Inventory Management – A Definitive Guide

Saved Report Views: Enhancing Efficiency and Delight in TallyPrime Reports

Unlock business efficiency with TallyPrime - All-in one business management software!

Thanks for Applying

We will be in touch with you shortly.

Inventory Management Problems and Solutions

Inventory Management Unsolved Problems PDF Download

Previous Lesson: Inventory Valuation Problems

Next Lesson: Economic Order Quantity Problems

Problem # 1:  

From the following calculate   (i) Re-ordering Level and                  (ii) Minimum Level

Minimum usage      100 units per week                Normal usage                 200 units per week

Maximum usage     300 units per week                Re-order period             4 to 6 weeks

(i) Re-ordering Level

Re-ordering level= Maximum consumption * Lead Time [maximum]

Re-ordering level= 300 * 6

Re-ordering level= 1,800 Units per week

(ii) Minimum Level

Minimum level= Reorder level – (Average consumption x lead time [Average])

Minimum level= 1,800 – (200 x 5)

Minimum level= 1,000 Units per week

>> Further Reading Inventory Management .

Problem # 2:  

Calculate Ordering Level, Minimum Level and Maximum Level from the following data:

Re-order quantity                       1,500 units                      Re-order period                    4 to 6 weeks

Maximum consumption            400 units per week       Average consumption        300 units per week

Minimum consumption            250 units per week

(i)  Ordering Level

Ordering level= Maximum consumption * Lead Time [maximum]

Ordering level= 400 * 6

Ordering level= 2,400 Units per week

Minimum level= 2,400 – (300 x 5)

Minimum level= 900 Units per week

(iii) Maximum Level

Maximum stock level= Reorder level – (Min consumption * Lead time [minimum]) + EOQ

Maximum stock level= 900 – (250 * 4) + 1,500

Maximum stock level= 2,400 – (1,000) + 1,500

Maximum stock level= 2,900 Units per week

>> Further Reading Inventory Valuation .

Problem # 3:  

The following information is available in respect of component DP 5:

Maximum stock level                                                 8,400 units

Budgeted consumption- maximum                        1,500 units per month

Budgeted consumption- minimum                         800 units per month

Estimated delivery period                                         Maximum 4 months and minimum 2 months

You are required to calculate Re-order level

Ordering Level

Ordering level= 1,500 * 4

Ordering level= 6,000 Units per week

>> Do Practice  Inventory Valuation MCQ .

Problem # 4:  

From the following date for the last twelve months, compute the Average Stock Level for a component.

Maximum usage in a month           300 units          Minimum usage in a month              200 units

Average usage in a month              225 units            Re-ordering quantity                          750 units

Time lag procurement of material                   Maximum 6 months and Minimum 2 months

Average Stock Level

Average Stock Level = Minimum Stock Level + ½ of EOQ

Re-ordering level= 1,800 Units per month

Minimum level= 1,800 – (225 x 4)

Minimum level= 900 Units per month

Average Stock Level = 900 + ½ (750)

Average Stock Level = 1,275 Units per month

>> Practice  Inventory Valuation Problems and Solutions .

Problem # 5: 

Find out Minimum Stock Level, Maximum Stock Level and Ordering Level from the following particulars:

Minimum consumption       100 units per day              Maximum consumption    175 units per day

Normal consumption           125 units per day               Re-order quantity                1,500 units

Minimum period for receiving goods      7 days             Maximum period for receiving goods   15 days

Normal period for receiving goods   10 days

(i) Ordering Level

Ordering level= 175 * 15

Ordering level= 2,625 Units per week

Minimum level= 2,625 – (125 x 10)

Minimum level= 1,375 Units per week

Maximum stock level= 2,625 – (100 * 7) + 1,500

Maximum stock level= 3,425 Units per week

>> Further Reading Cost of Goods Sold .

Related Topics

Inventory Management MCQs

Inventory Management

Economic Order Quantity

Economic Order Quantity MCQ

Economic Order Quantity Problems

More Interest

Payroll Systems

Labor Cost MCQs

Labor Cost Problems

Inventory Valuation

Further Readings

Cost Accounting

Cost Accounting MCQs

Cost Accounting Problems

Cost Accounting Papers

Cost Accounting Workbook

15 Comments

good article

Thanks for another excellent article. Where else could anyone get that kind of information in such a perfect way of writing?

fantastic article i like it god bless you

Thank you for some other wonderful article. Where else could anybody get that kind of information in such an ideal way of writing? I’ve a presentation subsequent week, and I’m on the look for such info.

This is my first time pay a quick visit at here and i am in fact pleassant to read everthing at single place.

You’re so cool! I do not suppose I’ve read anything like this before. So great to find somebody with a few original thoughts on this subject matter. Seriously.. thank you for starting this up. This site is something that is required on the web, someone with a little originality!

My relatives every time say that I am killing my time here at net, but I know I am getting knowledge daily by reading these good posts.

Way cool! Some very valid points! I appreciate you writing this article plus the rest of the website is really good.

Heya just wanted to give you a quick heads up and let you know a few of the pictures aren’t loading properly. I’m not sure why but I think its a linking issue. I’ve tried it in two different web browsers and both show the same results.

I think the admin of this site is truly working hard in favor of his web site, as here every material is quality based data.

amazing article

Saved as a favorite, I really like your web site!

Hello everybody, here every person is sharing these familiarity, so it’s pleasant to read this web site, and I used to visit this web site every day.

Thanks for the article

Submit a Comment Cancel reply

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Submit Comment

6 Common Inventory Management Challenges and How to Solve Them

Inventory management is the process of overseeing the flow of goods and materials within an organization. It includes activities such as ordering, storing, tracking, and selling products, as well as ensuring that inventory levels are sufficient to meet customer demand without causing overstocking or stockouts. Effective inventory management is crucial for businesses to maximize profits by reducing carrying costs, minimizing waste, and avoiding lost sales due to out-of-stock items. It can be facilitated through the use of software systems, such as inventory management software. Also through the implementation of best practices, such as using demand forecasting and set reorder points.

Inventory Management Challenges

Companies can face many different challenges in inventory management. It is very important to fix these challenges to keep running the business. Tracking the purchase and sale of goods can help companies to grow their business effectively. FIFO and LIFO are the two types of inventory management, and companies may encounter varying issues with each approach that require specific strategies and unique solutions to overcome.

Data Inaccuracy

Data inaccuracy can be very bad for the company; it can literally destroy the business. Those companies that don’t track their stock regularly can face the problem of data inaccuracy. Data inaccuracy occurs due to different reasons such as; not tracking products, not removing damaged stock, employee theft, etc. If a company is not regularly checking its stocks and data, there is a possibility that employees of that company are stealing items. Most companies do inventory management once a year and they face such challenges. This issue can be fixed by changing the approach. Companies must do inventory management regularly and maintain records to avoid data inaccuracy.

Limited Visibility

Limited visibility can be a very big problem. The simple meaning of limited visibility is hard to find or not easily visible stock. Many companies have a big library of products in their warehouses, and franchises, and managing their stock can be very difficult. Such companies face the problem of limited visibility. This means the products are available, but the right location of the product is unknown. It is hard to find stock when companies are facing a limited visibility challenge. This can be fixed by categorizing the products and mentioning their locations in the records. For example; if a company is trying to find stock A and they don’t know where it is, it can waste a lot of time but if they have written down the location of stock A while unloading stock in a warehouse, that can make it easy to find the stock.

Manual Documentation

Many businesses no longer consider using books for manual documentation a reliable practice in inventory management. This is because relying on books can create challenges as they can easily become damaged, lost, or contain unreliable information, leading to errors in inventory data. Despite this, many companies continue to use manual documentation and face challenges as a result. A better approach is to use computer systems and software for inventory management and other business documentation. This approach allows for easy maintenance of records and enables backups to be taken, thus ensuring reliability and minimizing the risks of data loss.

Space Management

Effective space management is crucial for successful inventory management. Failure to manage space can cause chaos in the warehouse, stores, or franchises, making it difficult to locate and manage stock, ultimately disrupting the business. Using cardboard display boxes can help companies categorize and store products in an organized manner, making it easy to find items even in a large stock. These boxes are made of a strong, printable cardboard material that ensures product safety and allows brands to print stock-related details. This makes it easier for companies to manage their inventory and provide unique experiences to customers.

Poor Management of Stocks

Poor stock management can also be very disturbing in inventory management. If a company doesn’t plan stock management properly, it can be a very big problem. Stock management includes a bunch of different things such as; tracking in and out of products, reordering products, and high cost of storage. It is very important to track in and out of products and this can be done using inventory management software. Tracking in and out of products can help companies avoid financial losses. It has happened in many cases, companies have received faulty stock from manufacturers or wholesalers, and because they were not tracking in and out, they have to face financial loss.

When a company is tracking all products properly, reordering stock can become very easy. When a stock is reaching a dead end, the company can get to know about it through inventory management software and can reorder stock in time. The high cost of storage can also be an issue and this can be managed by using wholesale cardboard display boxes . These display boxes are made up of recycled material which costs less than any other material.

Expiry Management

Expiry management refers to the process of tracking and managing the expiration dates of products, materials, or documents. It involves monitoring the shelf life of perishable goods, the validity of contracts or licenses, and the expiration of important documents such as passports or visas. Effective expiry management is important for ensuring compliance with regulations, minimizing waste and financial losses, and maintaining customer satisfaction. It can be facilitated through the use of software systems, automated alerts, and regular inventory checks. If the software detects an expiry product, it can show a message with the product id.  

* Terms & Conditions apply

In conclusion, inventory management can be a complex and challenging task for many businesses. In particular, those that deal with a large volume of products or operate across multiple locations. To address these challenges, businesses can implement a range of solutions, such as using inventory management software, improving supply chain visibility, setting reorder points, and implementing lean inventory management practices. By taking a proactive approach to inventory management, businesses can gain a competitive advantage and achieve sustainable growth.

My name is Sarah Allen. I am a professional writer, who loves to write about different topics. I take pride in my work, and even being very experienced in what I do, I am still eager to learn and serve.

Related Posts:

• 6 Common Electronics Assembly Manufacturing…
• Common Reasons for ERP Implementation Failures and…
• Order Fulfillment: Benefits and Common Challenges

Academia.edu no longer supports Internet Explorer.

To browse Academia.edu and the wider internet faster and more securely, please take a few seconds to  upgrade your browser .

Enter the email address you signed up with and we'll email you a reset link.

• We're Hiring!
• Help Center

Inventory Management Example Problems with Solutions

Related Papers

sfgwerw uioyui

美国留学生学历认证【QQ微信744043126】办国外学历学位认证/国境外学历学位认证/美国学历学位认证 国外学历学位认证书/美国留学学位认证 法国文凭认证/美国学位认证流程/国外文凭认证/美国毕业证书认证/新加坡文凭认证/美国高中毕业证书/美国文凭认证/美国大学毕业证书/美国文凭毕业证书/美国毕业证书查询 /美国毕业证认证/美国学历认证流程/美国文凭认证/纽约学历学位认证/美国留学学历认证/海外学历学位认证/香港学历学位认证/ 美国学位认证/美国毕业证认证/美国毕业证书认证/留学生学历学位认证/留学生毕业证认证 办理宾夕法尼亚大学毕业证成绩单学历认证University of Pennsylvania 办理杜克大学Blue Devil毕业证成绩单学历认证Duke University 办理达特茅斯学院毕业证成绩单学历认证 Dartmouth College 办理圣路易斯华盛顿大学WU毕业证成绩单学历认证Washington University in St Louis 办理康奈尔大学毕业证成绩单学历认证Cornell University 办理约翰霍普金斯大学Hopkins毕业证成绩单学历认证Johns Hopkins University 办理布朗大学毕业证成绩单学历认证 Brown University 办理莱斯大学毕业证成绩单学历认证Rice University 办理埃默里大学毕业证成绩单学历认证Emory University 办理美国圣母大学毕业证成绩单学历认证 University of Notre Dame 办理范德堡大学Vandy毕业证成绩单学历认证 Vanderbilt University 办理加州大学伯克利分校Cal毕业证成绩单学历认证University of California Berkeley 办理卡内基梅隆大学CMU毕业证成绩单学历认证Carnegie Mellon University 办理乔治城大学毕业证成绩单学历认证Georgetown University 办理塔夫斯大学毕业证成绩单学历认证Tufts University 办理维克森林大学毕业证成绩单学历认证Wake Forest University 办理北卡罗来纳大学教堂山分校UNC毕业证成绩单学历认证The University of North Carolina at Chapel 办美国学历【Q微信744043126】|加州洛杉矶分校大学UCLA毕业证|成绩单学位证书 University of California Los Angeles 办美国学历【Q微信744043126】|纽约大学NYU毕业证|成绩单学位证书 (New York University) 办美国学历【Q微信744043126】|普渡大学Purdue毕业证|成绩单学位证书 (Purdue University) 办美国学历【Q微信744043126】|哥伦比亚大学毕业证|成绩单学位证书 (Columbia University) 办美国学历【Q微信744043126】|加州尔湾分校大学UCI毕业证|成绩单学位证书 University of California-Irvine 办美国学历【Q微信744043126】|东北大学NEU毕业证|成绩单学位证书 (Northeastern University) 办美国学历【Q微信744043126】|密歇根安娜堡分校大学UMich毕业证|成绩单学位证书 (University of Michigan -- Ann Arbor) 办美国学历【Q微信744043126】|密歇根州立大学MSU毕业证|成绩单学位证书 (Michigan State University) 办美国学历【Q微信744043126】|俄亥俄州立大学OSU毕业证|成绩单学位证书 (Ohio State University) 办美国学历【Q微信744043126】|亚利桑那州立大学ASU毕业证|成绩单学位证书 Arizona State University 办美国学历【Q微信744043126】|华大华盛顿大学UW毕业证|成绩单学位证书 University of Washington 办美国学历【Q微信744043126】|波士顿大学BU毕业证|成绩单学位证书 Boston University 办美国学历【Q微信744043126】|宾夕法尼亚州立大学PSU毕业证|成绩单学位证书 Penn State University-University Park 办美国学历【Q微信744043126】|印第安纳伯明顿分校大学毕业证|成绩单学位证书 Indiana University,Bloomingto 办美国学历【Q微信744043126】|明尼苏达双城分校大学毕业证|成绩单学位证书 University of Minnesota, Twin Cities 办美国学历【Q微信744043126】|纽约州立布法罗分校大学SUB毕业证|成绩单学位证书 SUNY University at Buffalo 办美国学历【Q微信744043126】|加州伯克利分校大学UCB毕业证|成绩单学位证书 University of California – Berkeley 办美国学历【Q微信744043126】|德克萨斯达拉斯分校大学UTD毕业证|成绩单学位证书 The University of Texas at Dallas 办美国学历【Q微信744043126】|佛罗里达大学UFL毕业证|成绩单学位证书 University of Florida 办美国学历【Q微信744043126】|宾大宾夕法尼亚大学UPenn毕业证|成绩单学位证书 University of Pennsylvania 办美国学历【Q微信744043126】|美国大学UT毕业证|成绩单学位证书 Austin Texas A&M University University of Texas at Austin 办美国学历【Q微信744043126】|卡内基梅隆大学CMU毕业证|成绩单学位证书 Carnegie Mellon University 办美国学历【Q微信744043126】|加州圣地亚哥分校大学UCSD毕业证|成绩单学位证书 (University of California -- San Diego) 办美国学历【Q微信744043126】|加州河滨分校大学UCR毕业证|成绩单学位证书 (University of California--Riverside) 办美国学历【Q微信744043126】|俄勒冈大学UO毕业证|成绩单学位证书 University of Oregon 办美国学历【Q微信744043126】|休斯敦大学UH毕业证|成绩单学位证书 University of Houston 办美国学历【Q微信744043126】|波士顿學院大学BC毕业证|成绩单学位证书 BOSTON College 办美国学历【Q微信744043126】|爱荷华州立大学ISU毕业证|成绩单学位证书 Iowa State University 办美国学历【Q微信744043126】|纽约州立石溪分校大学SBU毕业证|成绩单学位证书 Stony Brook University SUNY 办美国学历【Q微信744043126】|匹兹堡大学PITT毕业证|成绩单学位证书 University of Pittsburgh 办美国学历【Q微信744043126】|芝加哥大学毕业证|成绩单学位证书 University of Chicago 办理美国毕业证/办理美国文凭/办理美国假文凭/办理美国学位证/办理美国学历证书/办理美国成绩单/办理美国毕业证成绩单/办理美国大学毕业证/办理美国大学文凭/办理美国大学假文凭/办理美国大学学位证/办理美国大学学历证书/办理美国大学成绩单/办理美国大学毕业证成绩单/代办美国毕业证/代办美国文凭/代办美国假文凭/代办美国学位证/代办美国学历证书/代办美国成绩单/代办美国毕业证成绩单/代办美国大学毕业证/代办美国大学文凭/代办美国大学假文凭/代办美国大学学位证/代办美国大学学历证书/代办美国大学成绩单/代办美国大学毕业证成绩单/制作美国毕业证/制作美国文凭/制作美国假文凭/制作美国学位证/制作美国学历证书/制作美国成绩单/制作美国毕业证成绩单/制作美国大学毕业证/制作美国大学文凭/制作美国大学假文凭/制作美国大学学位证/制作美国大学学历证书/制作美国大学成绩单/制作美国大学毕业证成绩单/美国毕业证/美国文凭/美国假文凭/美国学位证/美国学历证书/美国成绩单/美国毕业证成绩单/美国大学毕业证/美国大学文凭/美国大学假文凭/美国大学学位证/美国大学学历证书/美国大学成绩单/美国大学毕业证成绩单/买美国毕业证/买美国文凭/买美国假文凭/买美国学位证/买美国学历证书/买美国成绩单/买美国毕业证成绩单/买美国大学毕业证/买美国大学文凭/买美国大学假文凭/买美国大学学位证/买美国大学学历证书/买美国大学成绩单/买美国大学毕业证成绩单/购买美国毕业证/购买美国文凭/购买美国假文凭/购买美国学位证/购买美国学历证书/购买美国成绩单/购买美国毕业证成绩单/购买美国大学毕业证/购买美国大学文凭/购买美国大学假文凭/购买美国大学学位证/购买美国大学学历证书/购买美国大学成绩单/购买美国大学毕业证成绩单 美国代办Texas A&M文凭毕业证留学回国找工作【微信QQ744043126】德克萨斯大学学位证文凭办理@提高学分改成绩分数GPA@造假成绩文凭伪造毕业证@求职办理国外毕业证Texas A&M University 美国代办Texas A&M文凭毕业证留学回国找工作【微信QQ744043126】德克萨斯大学学位证文凭办理@提高学分改成绩分数GPA@造假成绩文凭伪造毕业证@求职办理国外毕业证Texas A&M University 美国代办Texas A&M文凭毕业证留学回国找工作【微信QQ744043126】德克萨斯大学学位证文凭办理@提高学分改成绩分数GPA@造假成绩文凭伪造毕业证@求职办理国外毕业证Texas A&M University 美国代办Texas A&M文凭毕业证留学回国找工作【微信QQ744043126】德克萨斯大学学位证文凭办理@提高学分改成绩分数GPA@造假成绩文凭伪造毕业证@求职办理国外毕业证Texas A&M University 美国代办Texas A&M文凭毕业证留学回国找工作【微信QQ744043126】德克萨斯大学学位证文凭办理@提高学分改成绩分数GPA@造假成绩文凭伪造毕业证@求职办理国外毕业证Texas A&M University

EuroIntervention

Basil S Lewis

Advances in Life Science and Technology

Mufeed Ewadh

Hiroshi Senou

wahyu damayanti

Culinary business is increasingly in demand by most culinary connoisseurs. One way for culinary entrepreneurs so that their culinary business is better known is by giving a unique name so that culinary connoisseurs are curious to visit it. Giving a name is an effort to find out the cultural value of the community owner. The purpose of this study is to describe the form of self-identity in the names of restaurants in Pontianak. The theory used uses qualitative methods. The supporting techniques are (1) determining the location of the study, (2) determining the informant technique using purposive sampling techniques developed using snowball sampling techniques. (3) data collection techniques that include observation, interviews, document studies or literature studies, (4) data validation, (5) data analysis, and finally (6) writing of research results. The results of this study are that there is a form of self-identity in many ethnic groups in Indonesia including Padang, Java, Malay, P...

Sibelle Dias

Em Aurantioideae (Rutaceae) destacam-se os generos Citrus , Poncirus , Fortunella e Murraya , devido ao seu potencial economico na producao de alimentos e valor ornamental. Citogeneticamente, as especies desse grupo possuem uniformidade em relacao ao numero cromossomico 2 n =18, mas sao diversificadas quanto ao padrao de distribuicao da heterocromatina, observada atraves da coloracao com Cromomicina (CMA). Murraya paniculata e filogeneticamente distante de Citrus , entretanto seu padrao de distribuicao da heterocromatina e muito semelhante ao de varias especies deste genero. Assim, com o objetivo de conhecer as sequencias repetidas de DNA que compoem a heterocromatina de M. paniculata , e compara-las com a principal sequencia satelite presente na heterocromatina das especies de Citrus (CsSat181), foi realizado um sequenciamento (NGS) do genoma de M. paniculata , utilizando a plataforma Illumina HiSeq. As sequencias obtidas foram analisadas no pipeline Repeatexplorer, ( https://repea...

Journal of enzyme inhibition and medicinal chemistry

Mariyana Atanasova

The inhibition of the enzyme acetylcholinesterase (AChE) increases the levels of the neurotransmitter acetylcholine and symptomatically improves the affected cognitive function. In the present study, we searched for novel AChE inhibitors by docking-based virtual screening of the standard lead-like set of ZINC database containing more than 6 million small molecules using GOLD software. The top 10 best-scored hits were tested in vitro for AChE affinity, neurotoxicity, GIT and BBB permeability. The main pharmacokinetic parameters like volume of distribution, free fraction in plasma, total clearance, and half-life were predicted by previously derived models. Nine of the compounds bind to the enzyme with affinities from 0.517 to 0.735 µM, eight of them are non-toxic. All hits permeate GIT and BBB and bind extensively to plasma proteins. Most of them are low-clearance compounds. In total, seven of the 10 hits are promising for further lead optimisation. These are structures with ZINC IDs:...

Folasade Adebayo

4 TIIVISTELMÄ, Finnish summary 7 LIST OF ORIGINAL PUBLICATIONS 13 ABBREVIATIONS 15

Jorge Quiroz Valiente

Micropaleontology

Galina Nestell

RELATED PAPERS

New England Journal of Medicine

Optimus PRIME

A.R. Thakur

Carlos Alberto Aquino Rodriguez

Journal of Asthma and Allergy

Esteban Gabazza

Macromolecules

Journal of Radiological Protection

Irina Zvonova

JCMS: Journal of Common Market Studies

Kristine Kern

Belessova Damira

Adriana noemi Torres

Hung-lin Fu

Samuel Velasquez

Refuge: Canada's Journal on Refugees

Howard Adelman

Revista de Derecho (Concepción)

Sebastián Campos Micin

Physics Letters B

Keith R Lassey

See More Documents Like This

RELATED TOPICS

•   We're Hiring!
•   Help Center
• Find new research papers in:
• Health Sciences
• Earth Sciences
• Cognitive Science
• Mathematics
• Computer Science
• Academia ©2024

Start typing

• Trade Management
• International Trade Finance
• Market Entry Strategies
• Marketing & Sales
• Research & Development
• Supply Chain Management
• CITP® |FIBP® Spotlight
• Import Export Jobs
• International Trade Courses
• International Trade Workshops
• International Trade Certification
• International Trade Resources
• FITTskills Lite Downloads
• FITT Small Business Guide: The Scaling Up Edition

Trending topics:

• Procurement
• CITP®|FIBP® designation

The 9 steps you need to solve your inventory problems

By: FITT Team

These inventory problems represent waste . They tie up company money, require material handling and consume valuable space. Perhaps, most importantly, inventory problems make the warehousing operation larger and more complex, and therefore costlier than necessary.

The following systematic process can help companies assess the size of their inventory problems and find ways to limit their impact.

1. Define the problem

Start with the idea that all inventory is a problem unless there is financial justification for it. Then list the categories of inventory problems that may represent the biggest losses, for example:

• Incorrectly located material
• Obsolete material
• Defective material

2. Determine the value for each category

For example, measure the overstock by the number of weeks or months of supply on hand, and determine the value of these categories. Each measurement can define the borderline between justifiable and inventory problems.

3. Develop auditing and reporting procedures to track the problem

Set up a process or a procedure that will automatically and regularly measure the amount of inventory problems on hand. Be sure that the measurements provide breakdowns by location, product line, age of the stock, reason for the problem and so on. Also, provide an evaluation tool that will be able to pinpoint the details underlying the measurement.

4. Establish inventory problem levels as a standard performance measurement

On a worldwide basis, North American business is often criticized for its lack of patience. Its focus on short-term results leads to a tendency to develop short-term solutions and to abort a project if these solutions do not deliver the desired results quickly. This situation can be avoided by ensuring that inventory problem levels are as important as productivity and short-term sales. As a result, they should be a formal part of the measurement of the business operation.

5. Create a short-term cure

The short-term cure is usually simple to define but difficult to execute: get rid of the problem stock. The organization will have to accept the short-term, one-time cost of disposing of the problems. Although this may be difficult, it has to be done. This task is easier to accomplish if the organization already has an established reverse supply chain.

6. Plan and schedule the disposal of problem stock

Creativity is essential in developing ways to dispose of problem stock. Disposal ideas, depending on the product can include:

• Selling the problem stock to customers, brokers or inventory clearance houses at discounted prices
• Reworking the stock
• Using for substitutions
• Disassembling and reusing components
• Transferring intra-company
• Using for R&D, i.e. new product designs
• Using for training
• Sending to scrap

7. Determine the causes of the inventory problems

Identify how the problem was created in the first place by using the root cause analysis method, for instance. Prompt monitoring and disposal of inventory problems help limit the cost, but the real objective should be to prevent inventory problems from developing at the outset.

8. Look for problems

Identify situations that can cause inventories to become a problem. Check for:

• Over-optimistic sales forecasts
• Unplanned, quick-fix engineering changes
• Poor communication among warehousing, purchasing, scheduling and production departments
• Market and technology changes
• Vendor and production failures to meet schedules
• Incorrect lot sizing and/or ordering policies
• Excess safety stocks
• Inaccurate inventory data
• Poor production planning and/or unrealistic scheduling

9. Develop a long-term cure

Inventory problems will continue to exist, and the magnitude of the problems will not be reduced until long-term cures are adopted. These cures will most likely emerge as the causes are defined. In some instances, implementing the cures may involve substantial change to existing business processes; in other instances, the cures may be relatively easy to implement.

The basic principle for managing inventory is economic efficiency.

If inventory is the cheapest way to meet a challenge or solve a problem, then the inventory is justified. However, if there are other alternatives that cost less to implement, then the inventory is a problem, and it should not be kept.

A long-term outlook and a willingness to dig into the details and analyze the situation will result in a more efficient and successful business.

All organizations, whether a supplier of raw materials, finished goods to distributors or retailers, deal with problem inventory. The challenge for foreign suppliers is the distance between themselves and their customers. Depending on their contract agreements for inventory management , foreign suppliers need to compare the cost of transporting their goods back into their inventory with the cost and potential value that can be gained by contracting reverse logistics services from a third party provider. Of course, if foreign suppliers are using VMI or JIT models, the risk of potential inventory problems is minimized.

About the author

Author: FITT Team

The Forum for International Trade Training (FITT) is the standards, certification and training body dedicated to providing international business training, resources and professional certification to individuals and businesses. Created by business for business, FITT’s international business training solutions are the standard of excellence for global trade professionals around the world. View all posts by FITT Team

Related stories

Tap into a “Global Productivity Mindset” to keep your business agile from supply chain to talent

New UK legislation on electronic trade documents ushers in a world of possibilities for global businesses

How international trade will be impacted by Suez and Panama Canal disruptions in 2024

Best of 2023: Top 10 most-read international trade articles from the past year

Disqus comments, leave a reply cancel reply.

Your email address will not be published. Required fields are marked *

Save my name, email, and website in this browser for the next time I comment.

Subscribe to our mailing list

Email address:

Solving Inventory Management Problems through Deep Reinforcement Learning

• Published: 10 December 2022
• Volume 31 , pages 677–689, ( 2022 )

Cite this article

• Qinghao Wang 1 , 3 ,
• Yijie Peng 1 , 2 &
• Yaodong Yang 1  

648 Accesses

5 Citations

Explore all metrics

Inventory management (e.g. lost sales) is a central problem in supply chain management. Lost sales inventory systems with lead times and complex cost function are notoriously hard to optimize. Deep reinforcement learning (DRL) methods can learn optimal decisions based on trails and errors from the environment due to its powerful complex function representation capability and has recently shown remarkable successes in solving challenging sequential decision-making problems. This paper studies typical lost sales and multi-echelon inventory systems. We first formulate inventory management problem as a Markov Decision Process by taking into account ordering cost, holding cost, fixed cost and lost-sales cost and then develop a solution framework DDLS based on Double deep Q-networks (DQN).

In the lost-sales scenario, numerical experiments demonstrate that increasing fixed ordering cost distorts the ordering behavior, while our DQN solutions with improved state space are flexible in the face of different cost parameter settings, which traditional heuristics find challenging to handle. We then study the effectiveness of our approach in multi-echelon scenarios. Empirical results demonstrate that parameter sharing can significantly improve the performance of DRL. As a form of information sharing, parameter sharing among multi-echelon suppliers promotes the collaboration of agents and improves the decision-making efficiency. Our research further demonstrates the potential of DRL in solving complex inventory management problems.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price includes VAT (Russian Federation)

Instant access to the full article PDF.

Rent this article via DeepDyve

Institutional subscriptions

Similar content being viewed by others

Scalable multi-product inventory control with lead time constraints using reinforcement learning

Hardik Meisheri, Nazneen N. Sultana, … Harshad Khadilkar

A deep q-learning-based optimization of the inventory control in a linear process chain

M.-A. Dittrich & S. Fohlmeister

Fully dynamic reorder policies with deep reinforcement learning for multi-echelon inventory management

Patric Hammler, Nicolas Riesterer & Torsten Braun

Data Availability

The data that support the findings of this study are available from the corresponding author upon reasonable request.

Angulo A, Nachtmann H, Waller M A (2011). Supply chain information sharing in a vendor managed inventory partnership. Journal of Business Logistics 25(1): 101–120.

Article   Google Scholar  

Arrow K J, Karlin S, Scarf H E. (1958). Studies in the Mathematical Theory of Inventory and Production . Stanford University.

Arulkumaran K, Deisenroth M P, Brundage M, Bharath A A (2017). Deep reinforcement learning: A brief survey. IEEE Signal Processing Magazine 34(6): 26–38.

Beamon B M (1998). Supply chain design and analysis: Models and methods. International Journal of Production Economics 55(3): 281–294.

Bijvank M, Vis I F A (2011). Lost-sales inventory theory: A review. European Journal of Operational Research 215(1): 1–13.

Article   MathSciNet   MATH   Google Scholar  

Chen F, Drezner Z, Ryan J K, Simchi-Levi D (2000). Quantifying the bullwhip effect in a simple supply chain: The impact of forecasting, lead times, and information. Management Science 46(3): 436–443.

Article   MATH   Google Scholar  

Chi C (2006). Optimal ordering policies for periodic-review systems with replenishment cycles. European Journal of Operational Research 170(1): 44–56.

Federgruen A, Zipkin P H (1984). An efficient algorithm for computing optimal (s, S) policies. Operations Research 32(6): 1268–1285.

Feldman, Richard M (1978). A continuous review (s, S) inventory system in a random environment. Journal of Applied Probability 15(3): 654–659.

Gijsbrechts J, Boute R N, Van Mieghem J, Zhang D (2021). Can deep reinforcement learning improve inventory management? Performance on dual sourcing, lost sales and multi-echelon problems. Manufacturing and Service Operations Management 24: 1349–1368.

Goldberg D A, Katz-Rogozhnikov D A, Lu Y, Sharma M, Squillante M S (2012). Asymptotic optimality of constant-order policies for lost sales inventory models with large lead times. Mathematics of Operations Research 41(3): 898–913.

Huh W T, Janakiraman G, Muckstadt J A, Rusmevichientong P (2009). Asymptotic optimality of Order-Up-To policies in lost sales inventory systems. Management Science 55(3): 404–420.

Ivanov S, D’yakonov A (2019). Modern deep reinforcement learning algorithms. arXiv Preprint arXiv:1906.10025 .

Johnson E L (1968). On (s, S) policies. Management Science 15(1): 80–101.

Karlin S, Scarf H. (1958). Inventory models of the Arrow-Harris-Marschak type with time lag. Studies in the Mathematical Theory of Inventory and Production . Palo Alto, CA: Standford University Press.

MATH   Google Scholar  

Kodama, M. (1967). The optimality of (S,s) policies in the dynamic inventory problem with emergency and non-stationary stochastic demands. Kumamoto Journal of Science.ser.a Mathematics Physics & Chemistry 8(1): 1–10.

Kok T D, Grob C, Laumanns M, Minner S, Rambau J, Schade K (2018). A typology and literature review on stochastic multi-echelon inventory models. European Journal of Operational Research 269(3): 955–983.

Li Y(2017). Deep reinforcement learning: An overview. arXiv preprint arXiv:1701.07274 .

McGrath T, Kapishnikov A, McGrath T, Kapishnikov A, Tomasev N, Pearce A, Hassabis D, Kim B, Paquet U, Kramnik V(2021). Acquisition of chess knowledge in Alphazero. arXiv preprint arXiv:2111.09259 .

Mnih V, Kavukcuoglu K, David S, Alex G, Ioannis A, Daan W, Martin R (2013). Playing Atari with deep reinforcement learning. arXiv Preprint arXiv:1312.5602 .

Minh V, Kavukcuoglu K, Silver D, Rusu A A, Veness J, Bellemare M G, Graves A, Riedmiller Martin, Fidjeland A K, Ostrovski G, Petersen Stig, Beattie C, Sadik A, Antonoglou I, King H, Kumaran D, Wierstra D, Legg S, Hassabis D (2015). Human-level control through deep reinforcement learning. Nature 518(7540): 529–533.

Mnih V, Badia A P, Mirza M, Graves A, Lillicrap T, Harley T, Silver D, Kavukcuoglu K (2016). Asynchronous methods for deep reinforcement learning. International Conference on Machine Learning 1928–1937, June, 2016.

Moor B, Gisbrechts J, Boute R N, Slowinski R, Artalejo J, Billaut J C, Dyson R, Peccati L (2022). Reward shaping to improve the performance of deep reinforcement learning in perishable inventory management. European Journal of Operational Research 301(2): 535–545.

Ruud H T, Willem K (2008). Dynamic inventory rationing strategies for inventory systems with two demand classes, Poisson demand and backordering. European Journal of Operational Research 190(1): 156–178.

Schulman J, Wolski F, Dhariwal P, Radford A, Klimov O (2017). Proximal policy optimization algorithms. arXiv Preprint arXiv:1707.06347 .

Sherbrooke, Craig C (1968). Metric: A multi-echelon technique for recoverable item control. Operations Research . 16(1): 122–141.

Van H H, Guez A, Silver D (2016). Deep reinforcement learning with double Q-learning. In Proceedings of the AAAI Conference on Artificial Intelligence 30, March, 2016.

Vanvuchelen N, Gijsbrechts, J, Boute R (2020). Use of proximal policy optimization for the joint replenishment problem. Computers in Industry 119: 103239.

Verhoef P C, Sloot L M (2006). Out-of-Stock: Reactions, antecedents, management solutions, and a future perspective. Retailing in the 21st Century . Springer, Berlin, Heidelberg.

Google Scholar  

Watkins, Christopher John Cornish Hellaby (1989). Learning from Delayed Rewards . King’s College, Cambridge, United Kingdom.

Xin L (2021). Understanding the performance of capped base-stock policies in lost-sales inventory models. Operations Research 69(1): 61–70.

Xin L, Goldberg D A (2016). Optimality gap of constant-order policies decays exponentially in the lead time for lost sales models. Operations Research 64(6): 1556–1565.

Zabel E (1962). A note on the optimality of (S,s) policies in inventory theory. Management Science 9(1): 123–125.

Zhao X, Qiu M (2007). Information sharing in a multi-echelon inventory system. Tsinghua Science & Technology . 12(4): 466–474.

Zipkin P (2008). Old and new methods for lost-Sales inventory systems. Operations Research: The Journal of the Operations Research Society of America 56(5): 1256–1263.

Download references

Acknowledgments

This work has been supported in part by (i) the National Natural Science Foundation of China, under grant Nos. 72022001, 92146003, and 71901003; (ii) CAAI-Huawei MindSpore, CCF-Tencent Open Research Fund.

Author information

Authors and affiliations.

Center for Multi-Agent Research, Institute for AI, Peking University, Beijing, 100871, China

Qinghao Wang, Yijie Peng & Yaodong Yang

Guanghua School of Management, Peking University, Beijing, 100871, China

College of Engineering, Peking University, Beijing, 100871, China

Qinghao Wang

You can also search for this author in PubMed   Google Scholar

Corresponding authors

Correspondence to Yijie Peng or Yaodong Yang .

Additional information

Qinghao Wang is a PhD student in the College of Engineering, at Peking University, Bejing, China. His research interests include multi-agent systems, deep reinforcement learning and game theory.

Yijie Peng is an associate professor in Guanghua School of Management, with affiliate faculty appointments in the Institute of Artificial Intelligence and National Institute of Health Data Science, all at Peking University. He got his PhD degree in management science from Fudan University in Shanghai, China, and B.S degree in mathematics from Wuhan University in China. His research interests include stochastic modeling and analysis, simulation optimization, machine learning, data analysis, and healthcare. He received Excellent Young Scholar Grant from NSFC, and was awarded INFORMS Outstanding Simulation Publication Award in 2019. He is a member of INFORMS and IEEE, and serves as an Associate Editor of the Asia-Pacific Journal of Operational Research and the Conference Editorial Board of the IEEE Control Systems Society.

Yaodong Yang is a machine learning researcher with ten-year working experience in both academia and industry. Currently, he is an assistant professor at Institute for AI, Peking University. His research is about reinforcement learning and multi-agent systems. He has maintained a track record of more than sixty publications at top conferences (NeurIPS, ICML, ICLR, etc) and top journals (Artificial Intelligence, National Science Review, etc), along with the best system paper award at CoRL 2020 and the best blue-sky paper award at AAMAS 2021. Before joining Peking University, he was an assistant professor at King’s College London. Before KCL, he was a principal research scientist at Huawei U.K. Before Huawei, he was a senior research manager at American International Group. He holds a Ph.D. degree from University College London, an M.Sc. degree from Imperial College London and a Bachelor degree from University of Science and Technology of China.

Rights and permissions

Reprints and permissions

About this article

Wang, Q., Peng, Y. & Yang, Y. Solving Inventory Management Problems through Deep Reinforcement Learning. J. Syst. Sci. Syst. Eng. 31 , 677–689 (2022). https://doi.org/10.1007/s11518-022-5544-6

Download citation

Published : 10 December 2022

Issue Date : December 2022

DOI : https://doi.org/10.1007/s11518-022-5544-6

Share this article

Anyone you share the following link with will be able to read this content:

Sorry, a shareable link is not currently available for this article.

Provided by the Springer Nature SharedIt content-sharing initiative

• Inventory management
• deep reinforcement learning
• parameter sharing
• multi-echelon models
• Find a journal
• Publish with us
• Track your research

• My presentations

Auth with social network:

Download presentation

We think you have liked this presentation. If you wish to download it, please recommend it to your friends in any social system. Share buttons are a little bit lower. Thank you!

Presentation is loading. Please wait.

Inventory Management (solved problems and exercises)

Published by May Hollie Beasley Modified over 8 years ago

Similar presentations

Presentation on theme: "Inventory Management (solved problems and exercises)"— Presentation transcript:

Special Inventory Models

Determining the Optimal Level of Product Availability

12 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Inventory Management 12 For Operations Management, 9e by Krajewski/Ritzman/Malhotra.

D – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Special Inventory Models D For Operations Management, 9e by Krajewski/Ritzman/Malhotra.

6 | 1 Copyright © Cengage Learning. All rights reserved. Independent Demand Inventory Materials Management OPS 370.

Inventory Management for Independent Demand Chapter 12, Part 2.

Introduction to Management Science

12 Inventory Management.

To accompany Quantitative Analysis for Management, 8e by Render/Stair/Hanna 6-1 © 2003 by Prentice Hall, Inc. Upper Saddle River, NJ Chapter 6 Inventory.

Managing Inventory throughout the Supply Chain

IES 303 Chapter 15: Inventory Management Supplement E

12 – 1 Copyright © 2010 Pearson Education, Inc. Publishing as Prentice Hall. Inventory Management Chapter 12.

Types of Inventory Transit stock or pipeline inventory Cycle stock

Inventory Management Chapter 16.

Chapter 12 Inventory Management

Inventory Management A Presentation by R.K.Agarwal, Manager (Finance), PFC.

Operations Management

Chapter 11, Part A Inventory Models: Deterministic Demand

Chapter 10—Inventory Management Inventory Management.

About project

© 2024 SlidePlayer.com Inc. All rights reserved.

Inventory Management: Benefits, Process, and Best Methods

By jaidyn farar.

As a thriving ecommerce business, your inventory is your greatest asset.

But it can also be your greatest liability.

When you sell and ship inventory quickly, continually replenishing it with new products, you’re not just making money—you’re also giving customers a great experience with your brand. On the other hand, if inventory runs out frequently or sits in your warehouse for months, you’re losing money and giving buyers a bad impression.

With the right inventory management techniques and technology, you’ll ensure that your inventory works for you, not against you. 

What is inventory management?

Inventory management is the process of monitoring and controlling the flow of goods through the supply chain . In addition to ordering, organizing, storing, and selling finished products, inventory management includes managing raw materials and product components.

The goal of inventory management is to achieve a balance, keeping enough stock on hand to meet customer demand without ever having too much or too little. You do this by forecasting demand, tracking inventory levels, and replenishing at the optimal times. 

Calculating inventory turnover

Inventory turnover is the rate at which you sell and replenish goods. A high inventory turnover ratio means you’re quickly selling and replenishing inventory, while a low one means you’re tying up cash in products that don’t sell.

Calculate inventory turnover using this formula:

Inventory turnover  = COGS (cost of goods sold) / average inventory

COGS represents the costs associated with producing or purchasing the goods you sell during a specific period. It includes the cost of raw materials, direct labor, and indirect expenses related to the production of goods. Average inventory can be calculated by adding your starting and ending inventory levels and dividing by two.

To optimize inventory turnover and automate the monitoring and reordering process, businesses use inventory management systems that integrate seamlessly with the other solutions in their tech stack.

Factors that affect inventory

Many factors affect your inventory, including the following: 

• Seasonality. Consumer demand fluctuates based on changing seasons, holidays , or specific times of the year. Changes in the timing and volume of product demand will require your businesses to adjust inventory levels.
• Promotions and sales. Promotions and sales often create spikes in demand. You’ll need to meet increased demand during promotional periods while avoiding overstocking once the promotion concludes.
• Supply chain disruptions. Disruptions in the supply chain, such as natural disasters, geopolitical events, or supplier issues, can impact the availability of raw materials or finished goods, leading to inventory shortages.
• Returns. Returns require you to account for returned items, assess their condition, and possibly restock or liquidate them.

What counts as inventory?

Inventory doesn’t just include finished products; it also includes the raw materials and supplies used to create those products. 

• Raw goods. Raw goods are unprocessed materials used in manufacturing, including things like wood, metal, plastic, and fabric.
• Work in progress (WIP) goods. WIPs are in the process of being manufactured but aren’t yet finished. 
• Finished goods. Finished goods have completed the manufacturing process and are available for customers to purchase.
• Maintenance repair and operation (MRO) goods. An MRO is used in production but is not part of the final product. This can include things like equipment and cleaning supplies. 

What does the inventory management process look like?

The inventory management process begins with anticipating the products you’ll sell within a set period (forecasting demand) and includes ordering, organizing, storing, monitoring, selling, and replenishing that inventory. 

1. Demand forecasting

Demand forecasting is a strategic process that involves analyzing historical sales data, studying market trends, and considering other relevant factors to predict future demand. Once a business has forecasted demand, they order new inventory to meet anticipated needs. 

Accurate demand forecasting helps organizations optimize their stock levels, focusing on products that will sell quickly and yield maximum profits.

2. Inventory delivery, inspection, and storage

Once a merchant has ordered inventory, suppliers deliver it to their facility. There, the stock is inspected to ensure nothing is missing or damaged. Afterward, warehouse staff members sort and store inventory in designated locations. In the process, new stock is entered into the warehouse management system (WMS), which logs the location of each SKU (stock keeping unit). 

3. Inventory level monitoring

Inventory visibility is crucial to a smooth order fulfillment operation, and it’s especially important for organizations that have adopted an omnichannel strategy. 

Without full visibility into stock levels, you’ll likely run into delays while picking and packing orders. Worse, you could run out of essential stock or over-order less important items. Ultimately, inaccurate inventory data can lead to costly errors and disruptions in supply chain operations.

Businesses have several options for monitoring inventory:

• Physical inventory counts. One method of monitoring inventory is physically counting all stock once or twice a year.
• Perpetual inventory management system. A perpetual inventory management system tracks inventory in real time.
• Periodic inventory management system. Unlike perpetual inventory management systems, periodic systems require physical inventory counts at the beginning and end of a period.
• Cycle counts. Cycle counting involves counting certain stock, such as fast-moving SKUs, on a regular basis. This helps verify that the information in your inventory management system is consistent with the actual inventory on hand.

In addition to your inventory management system, supply chain analytics tools like EasyPost Analytics provide valuable insights into inventory data. These tools provide real-time visibility into available inventory, including stock location, in-stock rates, and inventory depth.

4. Order placement and processing

With inventory levels being continually monitored and updated, online shoppers can easily see what’s available to purchase. When these customers place online orders, they initiate the order processing stage. 

Order information is sent to the warehouse system, which generates a picking slip that shows staff where products are located. Workers identify products using SKU numbers, pick them from stock, and bring them to the packing station, where they’re placed in the appropriate packaging. From there, packages receive a shipping label, and carriers pick them up to deliver them to customers.

5. Inventory replenishment

As stock is sold, the inventory management system automatically updates to reflect current stock levels and proactively identifies low-stock items. When inventory of products nears or drops below certain predetermined points, the system sends an alert that it’s time to reorder.

The benefits of inventory management in logistics

Effective inventory management will help you save time, optimize your warehouse operations, and provide a top-notch customer experience.

• Avoid stockouts and overstocking. Stockouts and overstocks are both problematic—depending on the situation, you’ll either miss out on revenue or restrict your cash flow. With proper inventory management, you won’t have to worry about either. 
• Avoid spoilage and dead stock. If you sell perishables like food, overstocks can lead to expired products that can’t be sold. Similarly, dead stock can’t sell because it’s gone out of style or become obsolete. Inventory management helps you anticipate demand and buy only what you can sell within a specified timeframe.
• Cut storage costs. You pay to store every SKU in your warehouse—and warehouse space doesn’t come cheap. Managing inventory helps you optimize storage space, thereby cutting costs.
• Improve cash flow. By keeping a leaner inventory ( like Target opens in new tab open_in_new and other big brands have focused on in 2024), you’ll be able to stay profitable without tying up cash in inventory that doesn’t sell. 
• Increase customer satisfaction. Good inventory management on your end contributes to a better buying experience for customers. With a well-stocked, well-organized warehouse, you’ll be able to fulfill orders quickly and accurately.

Now that we’ve covered the importance of inventory management, let’s look at some of the challenges that might stand in your way—plus solutions for overcoming them.

Inventory management challenges

The most significant inventory management challenges organizations face include overstocks and stockouts, lack of inventory visibility, inefficient processes, and poor inventory distribution.

Overstocks and stockouts

Overstocks tie up capital and warehouse space, while stockouts result in lost sales, dissatisfied customers, and a damaged reputation. Though overstocks and stockouts can be caused by several factors, the best solution is to implement demand forecasting and inventory analytics tools to better predict demand and adjust inventory stock accordingly. 

Lack of real-time stock visibility

Without real-time visibility into inventory levels, businesses may struggle with inefficiencies, delayed order fulfillment, and increased risk of stockouts or overstocks. Implementing an integrated inventory management system with barcode scanning and RFID technology can provide real-time visibility into stock levels across warehouses and distribution centers.

Inefficient processes

Inefficient inventory management leads to wasted time, increased labor costs, and mistakes in order fulfillment. In turn, these seemingly small inefficiencies can contribute to delayed order processing, poor customer service, and higher operational expenses. 

One potential solution? Streamline and automate inventory management processes with advanced software systems and workflow automation tools. Conducting regular process audits and employee training programs can also help identify and address inefficiencies.

Inventory distribution

A distributed inventory strategy involves storing and shipping inventory from several distribution centers located in different geographic areas. When executed well, this strategy helps businesses effectively meet demand in varying parts of the country, shipping orders quickly and reducing shipping costs. 

Unfortunately, failure to have inventory readily available where it's needed can have the opposite effect: delayed order fulfillment, increased shipping times, and higher delivery costs. Using data analytics and demand forecasting techniques can help in identifying high-demand regions and adjusting inventory placement accordingly.

Inventory management methods and techniques

Organizations use a variety of inventory management methods and techniques. The following strategies can help you manage your inventory effectively, overcoming the challenges discussed above. 

ABC analysis

ABC analysis categorizes inventory items into three groups based on their importance, with A being the most important and C being the least. 

• A stock represents 80% of your revenue
• B stock represents 15% of your revenue
• C stock represents 5% of your revenue

Because the A category consists of the most valuable inventory, it requires tighter inventory control and greater attention to avoid stockouts; you never want to run out of these products. On the other hand, products in the C category should probably be discounted to help them sell faster. 

Batch tracking

Batch tracking involves grouping items with similar properties—such as expiration date or manufacturing location—in order to ensure product quality. If you discover that a product is defective, batch tracking can reveal the source of the issue and streamline the recall process.

Bulk shipments

Bulk shipping involves transporting large quantities of inventory items in a single shipment. Because it’s cheaper to ship more items at once, ordering inventory in bulk will reduce transportation costs. If you place a large order, suppliers may even give you a discount on the goods themselves.

Consignment inventory

Under the consignment model, suppliers send inventory to your business but don’t transfer ownership until products are sold. This provides you with a wider product selection and reduces the upfront cost of purchasing goods from suppliers. 

Cross-docking

Cross-docking is a logistics strategy where goods are unloaded from inbound transportation and immediately loaded onto outbound transportation, bypassing storage. This reduces inventory holding costs, minimizes handling, and speeds up order fulfillment. 

Demand forecasting

Demand forecasting involves predicting future demand for products based on historical sales data, market trends, and other relevant factors. 

With accurate forecasting, you’ll optimize inventory levels, reduce stockouts, and improve customer satisfaction by having the right products available at the right time. On the other hand, inaccurate forecasts can lead to overstocking or stockouts.

Dropshipping

Dropshipping is a fulfillment method where businesses sell products without keeping them in stock. When a customer places an order, the merchant purchases the product from a supplier, who ships it directly to the customer. 

Dropshipping reduces inventory holding costs and eliminates the need for warehousing, but it decreases your control over product quality and fulfillment times.

Economic order quantity (EOQ)

EOQ is a formula used to determine the optimal amount of inventory a company should order to meet demand and minimize holding costs. It helps you strike a balance between ordering too much, leading to excess inventory, and ordering too little, resulting in stockouts. Keep in mind that EOQ works best for situations where demand doesn’t fluctuate much.

FIFO and LIFO

FIFO (first in, first out) and LIFO (last in, first out) are inventory valuation methods that determine the cost of goods sold and the value of ending inventory. 

FIFO assumes that the oldest inventory is sold first, while LIFO assumes that the newest inventory is sold first. Each method has tax and financial reporting implications, and the choice can impact profitability and inventory valuation accuracy.

Just-in-time (JIT) inventory 

JIT is an inventory management approach where businesses keep inventory levels as low as possible to still meet demand. 

When goods are acquired only as needed, you minimize inventory holding costs and reduce waste. This improves efficiency, but it requires very precise demand forecasting. If you face unexpected supply chain disruptions, your business could end up unable to meet customer demand. 

Lean manufacturing

The goal of lean manufacturing is to minimize waste and maximize efficiency in production processes by eliminating non-value-added activities. It improves inventory management by reducing excess inventory, lead times, and production costs while increasing flexibility and responsiveness. 

Materials requirements planning (MRP)

MRP is a software-based inventory management system that helps businesses plan and manage materials needed for production based on demand forecasts and production schedules. The system helps ensure the availability of materials at the right time and in the right quantity.

Perpetual inventory management

Perpetual inventory management involves continuously updating inventory records in real time, providing accurate and up-to-date inventory information. This enables better inventory control, reduces the risk of stockouts or overstocks, and improves decision-making. However, it requires robust inventory tracking systems that may require lots of resources to maintain.

Reorder point formula

The reorder point formula calculates the inventory level at which a new order should be placed to replenish stock before it runs out. Considering factors like lead time, demand variability, and safety stock, the formula helps businesses maintain adequate inventory levels to meet consumer demand. 

Safety stock

Safety stock is extra inventory held to decrease the risk of stockouts. It acts as a buffer, keeping popular products in stock and available even if demand fluctuates or your supply chain is disrupted. A word of caution, though: holding too much safety stock can tie up capital and increase holding costs.

Six Sigma is a data-driven methodology that helps businesses optimize inventory management. Because implementing Six Sigma can require significant investment in training and resources, it may not be the right option for every organization.

Choosing the right  inventory management software

An inventory management system is essential for monitoring stock levels and movement and letting you know when it’s time to replenish. With the right inventory management software, you’ll keep your most popular products available across all sales channels.

Smaller businesses sometimes often use periodic inventory management systems, which require occasional manual inventory counts. But at the enterprise level, you need a perpetual system that continually tracks stock levels in real time. 

Choosing the right inventory management software is an important decision. If you’re not sure how to approach it, consider bringing in an outside expert to make sure you’re getting exactly what your business needs. 

Streamline logistics from start to finish with EasyPost Analytics

Streamlined logistics operations start with the right data. When used strategically, data improves every supply chain decision you make, from your warehouse locations and layouts to your inventory management methods to the shipping carriers you work with.

EasyPost Analytics is a modern analytics platform that gathers all your warehouse and inventory data in one place, allowing you to make more informed decisions. The platform can help with the following (and much more):

• Tracking the quantity, location and status of inventory items in the warehouse
• Maintaining accurate inventory records, including verifying physical counts
• Identifying opportunities for process improvement

Inventory management is just the beginning. Talk with one of our data experts to learn what you can accomplish with EasyPost Analytics.

• SUGGESTED TOPICS
• The Magazine
• Newsletters
• Managing Yourself
• Managing Teams
• Work-life Balance
• The Big Idea
• Data & Visuals
• Reading Lists
• Case Selections
• HBR Learning
• Topic Feeds
• Account Settings
• Email Preferences

Is Your AI-First Strategy Causing More Problems Than It’s Solving?

• Oguz A. Acar

Consider a more balanced and thoughtful approach to AI transformation.

The problem with an AI-first strategy lies not within the “AI” but with the notion that it should come “first” aspect. An AI-first approach can be myopic, potentially leading us to overlook the true purpose of technology: to serve and enhance human endeavors. Instead, the author recommends following 3Ps during an AI transformation: problem-centric, people-first, and principle-driven.

From technology giants like Google to major management consultants like McKinsey , a rapidly growing number of companies preach an “AI-first” strategy. In essence, this means considering AI as the ultimate strategic priority , one that precedes other alternative directions. At first glance, this strategy seems logical, perhaps even inevitable. The figures speak for themselves: the sheer volume of investment flowing into AI technologies shows the confidence levels in an increasingly AI-driven future.

• Oguz A. Acar is a Chair in Marketing at King’s Business School, King’s College London.

Partner Center