6 Inventory management mistakes

That are sabotaging your business operations.

Inventory management is defined as the process of ordering, storing, using, and selling a list of items that belong to a company. It includes managing raw materials, components, and finished products, together with warehousing and processing of the items.

Inventory management

Inventory management means having enough stock available to meet all orders. Too much inventory that’s moving slowly means that you’re spending money to store products, which aren’t earning revenue immediately. Too little inventory means that it’s moving fast so that you have pending orders, and this makes customers unhappy and they can easily seek services elsewhere.

Proper inventory management requires that you consider the following:

  • How much inventory you need to meet current demand
  • Determine whether demand is likely to increase, decrease, or remain the same over the coming weeks or months
  • How much it costs to store and maintain slow-moving or stagnant inventory
  • How long it takes to receive inventory from suppliers
  • How soon you need to reorder considering the time it takes to receive orders from suppliers
  • Determine whether you have inventory that requires climate-controlled storage, significant space due to size, or an unusual shape that makes it difficult to optimize warehouse layout and inventory storage
  • Determine whether you can account for lost, damaged, or expired inventory
  • Determine whether you have adequate safety stock to mitigate the risk of possible supply chain disruptions (like COVID-19)
  • Determine whether you can ensure availability and reliability of backup secondary suppliers in case of such supply disruptions

Good inventory management helps companies to reduce costs. Read the entirety of this article to see the inventory management mistakes to avoid in order to boost your business operations.

Lack Of Performance Measurements

You may not be able to address issues with performance in your organization if you don’t have standards in place to do so. These standards are measure of customer service, inventory returns, and warehouse efficiency.

Managers should make sure they have mandatory tracking of fill rates and inventory turns for all products. Despite what they consider best for their operations, managers should track and increase the rates of the two metrics.

Not Having Qualified Employees To Manage Inventory

To have accurate inventory management, you need workers who can be trusted to do the job well. To implement a better inventory control system, consider the following:

  • Hire the right people.
  • Inventory managers should be held accountable.
  • Emphasize training from the start. Take advantage of on-site training for your employees by vendors that provide inventory management software and solutions.

Inability To Plan Due To Lack Of Forecasting

Not knowing the stocks you have at any given time will be a frustration to employees, and this will result in your inability to meet customer needs. You will lose the customers in the long run.

Having an automated inventory system will solve this problem. The system will provide real-time data as to whatever’s in stock. Also, constant access to accurate data will help you know what your customers want.

Lack Of Automation

In the absence of automation, you’d be using manual processes to track your stocks, resulting in wastage of time and money by having to look through the papers and fixing errors one after another. Whereas manual processes don’t allow access by multiple users at the same time, automated systems enable multiple employees to track items across several locations as they monitor orders and shipments.

Lack Of Inventory Counts

This means taking so long to physically count items to ensure that they match the data on your software. This means that you have to stop warehouse operations to do this, which is unnecessary and costly. Instead, you should be able to check inventory levels a section per day using a barcode inventory management system, which will provide accurate data.

Inadequate Organization Of Your Storage System

You’ll waste a lot of time and money when your workers have to travel to the other side of the shop or cross barriers to find items. Have your physical storage system equipped with automated inventory shttp://barriersystem in order for it to be efficient. Keep items that workers use often in places they can easily reach. Also, designate special spaces for the most required items.


Inventory management is critical to both start-up and established businesses. Always remember that the mistake that costs the most is poor inventory visibility and planning. Thus, an effective solution to this must be employed to ensure effective inventory management.