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Identifying the Cause of Your Inventory Problems

If we did an honest survey of inventory control and problems across all industries, several well-worn trends would emerge. Almost no business would give their inventory performance a perfect score. But here are a few things we’ve gleaned over the years. Great inventory control requires several things:

  • dependable courier services or drop-shippers
  • an up-to-date, accurate, synchronized inventory
  • rapid packing, pickup, and dispatch

On-topic, here are some common inventory issues we’ve uncovered:

Under-trained Employees

No matter how great your software or how well-automated your system, there is always that critical human element to managing inventory. Poorly or inadequately trained employees who do not fully grasp your inventory process or are not motivated to master your rotation regime are liabilities.

We’ve seen companies handle this issue successfully. First, designate at least one person who is well acquainted with your inventory system and can train new employees, oversee the warehouse and all the shipping operations. This person should be experienced in handling inventory problems as they arise and be an expert in training and motivating others to do the same. They should be able to identify shortages or the probability of running out of stock before it happens by conducting regular stock audits with detailed reports on inventory levels. They will become experts at calculating how much stock to order and use inventory management tools to optimize their procurement. And lastly, and most importantly, this person can accurately forecast how much inventory you may need at that particular facility in the following order cycle.

Properly trained employees will shorten your lead time and save you money downstream while building you a brand known for reliability and appreciated for efficiency.

Supply Chain Navigation

These days there’s a much “muddier” international trading scenario. To some extent, we are all being forced to adapt by accommodating the global “quirks” in the supply chain. It’s common to run into an increased number of partners, less reliable lead times and increased tracking issues. As businesses expand their product offerings, they put additional pressure on warehouse space and inventory processes. Meanwhile, stock levels need to be optimal to ensure availability and, at the same time, not risk investing more working capital than is wise.

The best way to address these issues lies in some combination of the following:

  • Lead time. The amount of time it takes to fulfill an order is crucial. While no one has a crystal ball to tell the future, you can keep an eye on holidays, weather conditions, the headlines and constant anticipation of other possible delays.
  • Safety stock maintenance. It’s a delicate balance, not overstocking and not understocking, but that magic number does exist and can be ferreted out.
  • Invest in an automated inventory system. Automating manual errors and maintaining an accurate stock count via real-time, automated updates will reflect itself quickly in the bottom line. Use barcoding systems to keep track of SKUs.
  • Use a multi-location stock management software. This is the best way to suggest redistributing inventory as per demand. It also ensures you use the stock you already own, avoiding additional spending and helping to optimize storage space.


Under-forecasting is something we see all the time – people getting sucked up into day-to-day operations and losing track of the big picture. This may seem like a no-brainer, but it is a very common issue.

And while none of us can accurately predict every possible thing that could happen in the future, it is prudent to set aside valuable time to study leading indicators. This way, you are always as prepared as possible to handle every upcoming surprise.

Explore systems that can automate your processes and help you alleviate inventory issues.

Our consultants can help you identify weak areas in your inventory management processes and make recommendations to guide you to success. Book a free consultation today.

Management Consulting Services

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