10 Inventory Management Challenges & How To Solve Them

10 Inventory Management Challenges and Ways to solve inventory management challenges

10 Inventory Management Challenges 

Sustaining a 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 10 inventory management challenges—and how to overcome them.

Managing inventory can be a challenging task. The process and results impact every aspect of your business. Hence, here are 10 inventory management challenges to take note in your supply chain.

1. Inconsistent Tracking

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

2. 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.

3. Inaccurate Data Collection

It is crucial 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.

4. Limited Visibility

When your inventory is difficult to be located 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.

5. Manual Processes

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.

6. Over Stocking

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.

7. 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.

8. Ineffective Communication

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

9. 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.

10. 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.

Axacute is a cloud-based solution that is designed for inventory & production data collection and tracking which is done via barcoding scanning. Not only it can improve accuracy of inventory/productivity, but also provides real-time tracking of order status. It is much more accurate & time saving comparing to manually keeping track of activities.

10 Ways To Solve Inventory Management Challenges

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

1. 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.

2. Warehouse Visibility

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

3. Go Paperless

Provide employees with the right inventory tools. They need software to replace manual inventory documentation, and paperless transactions for invoices and purchase orders. This helps to reduce human errors immensely.

4. Automate Reorders

Backordered inventory delays production which results in unsatisfactory customer experiences. Using an inventory management software helps set automatic reorder points based on preset stock levels and current availability to avoid overselling.

5. 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.

6. Reduce Human Error

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

7. 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.

Axacute comes with a Real-Time Dashboard that provides quick and intuitive at a glance to the management ensuring decisions can be made promptly and effectively.

8. Productivity Tools / Software

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.  

9. 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.

10. Optimize Warehouse 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.


The right inventory management software can automate processes, improve inventory practices and enhance customer experiences. 

We hope that the above ways can help you overcome inventory management challenges that are bound to happen in the warehouse.

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