Inventory management is one of the most challenging operations in the retail industry, regardless of the company’s size. In this field, inventory control efficiency directly influences customer satisfaction. To help you with this, the following blog will analyze 5 common inventory management problems and how to solve them.
Inventory management using paperwork and manual methods is inefficient and insecure. It also doesn’t scale well across several warehouses with a big amount of inventory. This is one of the most common inventory problems that retailers are facing.
There have been a lot of technological inventions that can do these manual tasks. To solve this problem, we recommend using a point of sale (POS) system. It is software that serves as a central management system for retailers, conducting tasks such as payment processing, inventory control, or customer management.
Do you know that only 63% of the time, retail businesses get the correct inventory information? Indeed, a lot of companies are struggling in maintaining a consistent and centralized management system. Software with no real-time synchronization can result in information discrepancies between multiple locations.
The solution for this is quite straightforward: make sure that the system you are using/ planning to use has real-time synchronization. You will stay up-to-date about your stocks. Receiving and locating the correct inventory is critical to ensuring smooth warehouse operations and pleasant customer experiences.
Overstocking or understocking
Overstocking or understocking both result from poor inventory source control. Having too much inventory on hand might be just as bad as having too little. Overstock negatively influences a company’s cash flow and can lead to inventory-related issues like storage and loss. Likewise, understock can prevent the company from gaining more sales.
To avoid these inventory management problems, our best advice is to consult sales reports to understand what are the best-sellers and the dead stocks. These reports are often auto-generated by a POS system. Besides, you can also use an MSI feature, such as getting notifications when your stock reaches a certain level. Again, an MSI would be a suitable solution for you.
There is always a vital human aspect to managing inventory, no matter how well-automated your system is. Employees that aren’t properly trained about your inventory system can be a problem.
We recommend that you have at least one person who is familiar with your inventory system and can educate new staff as well as supervise warehouse and delivery operations. On-the-job training can be an efficient way to familiarize your employees with the system.
Without consistent tracking, many elements of warehouse management would be subject to mistakes. You might stay on the wrong track and have an inaccurate view of the available stocks across your locations. Ineffective warehouse management like this might result in lost orders, order fulfillment delays, and delivery inaccuracies.
Therefore, it is always beneficial to conduct stocktakes frequently to avoid these inventory management problems. For example, you can devise a stocktake guideline for employees to follow. A consistent guideline can minimize errors when different people conduct stocktakes in multiple locations. Last but not least, don’t forget that technologies like POS or MSI may also be effective in this case.
Although inventory management problems are present, it doesn’t mean that retail businesses could not overcome them. We hope that with these guidelines, you can find inspiration to solve your problems. Almost every problem can become less of an obstacle with technology. If you are interested in the MSI system of ConnectPOS, don’t hesitate to contact us for more information!