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Inventory Management: Most Common Challenges and Solution to Overcome in 2020

Inventory Management
Digital Transformation

Inventory Management: Most Common Challenges and Solution to Overcome in 2020

Be it manufacturing, construction or retail, managing inventory is extremely critical for business growth. Inventory is the heart of the above industries. With that said, understanding the common challenges in inventory management becomes super important and industry heads are looking out for solutions to achieve profit and improve customer satisfaction. 

No matter where the inventory is located: be it warehouse, multiple locations or consigned or drop-shipped from supplier, managing inventory better is an absolute must for improved cash flow and reduced expenses. 

Some of the common challenges any industry will face with respect to inventory management are

  • Incorrectly located material
  • Obsolete material
  • Overstocks
  • Defective material

The above said aren’t the only challenges, but I have named a few. In fact, if you’re looking for a specific solution to inventory management, you have consider the material flow from procurement to disposal. 

To begin with, the first step to overcome the challenges is by identifying them. There are two ways you can approach this scenario: (I) try different solutions for each challenge, or (2) try a one-stop complete solution for all the challenges.

I’d recommend the latter as when you set out for the first one, you have to integrated data acquired from different software to multiple databases using third party tools and this might again be time-consuming, expensive and backbreaking. However, on the other hand, a comprehensive solution will have all specialized features to integrate the different process to databases without any discomfort. 

Now, let’s start with how to address the above-stated challenges. 

Challenge #1: Incorrectly located materials

The prime reason for this challenge is due to the lack of system in place to track in-store products/equipment. Most often, finding a specific product for sales from the inventory eats up lots of time of workforce and it is extremely hard to find a product among 1000s stocked. Picking a material incorrectly not only delays the sales but also impacts customer satisfaction. 

Solution: In-store product finder 

Tagging each and every product with a laser-etched QR-code or RFID tag or barcode will help the workforce identify any product of many. All the staff has to do is have a scanner. An indication lamp will be on once the scanner meets the respective product. The staff can easily find the product and pass it on to the sales team. This saves a lot of time and improves the sales cycle, customer satisfaction. 

SEE ALSO: “Top Asset Tracking Methods

Challenge #2: Obsolete material

This scenario often happens in almost all companies. Not every product/material will be sold and there would be few materials that are obsolete for some time and over a period of time, the materials will be abandoned by the inventory managers. However, when the need arises again, most of them fail to recognize and utilize obsolete materials and go for the new ones. This leads to an increase in expenses and wastage of the material. 

Solution: Stock control system

The application helps a lot in finding the dead inventory or obsolete materials to identify the stocks and utilize them properly and wisely. With such a system in place, the app will help the inventory managers to control the stocks. 

Challenge #3: Overstocks

Buying materials without selling the existing can hurt your business profit significantly. This challenge arises due to poor stock control and management by managers. When performed manually, a few materials will not be accounted for and buying the same materials again will bring down the profit. 

Solution: Stock auditing system

With a stock auditing system in place, the inventory managers can perform regular stock audits to identify the used and unused stocks to improve inventory efficiency. In this way, your enterprise would be able to save time and money and drive profit. 

Challenge #4: Defective material

Keeping a tab on the equipment/products all the time is extremely important for maintaining a healthy inventory. Especially, finding defective material on a daily basis is essential for fixing the issues or replacing it with another. Workforce performs this task manually every day and this consumes a lot of time. 

Solution: Preventive maintenance system

Having a preventive maintenance system will enable the workforce to perform the equipment checks on the go. It makes the job of the workforce easier as they can identify the defective material easily and report to the authorities from anywhere, any time. By this way, improving the quality and efficiency of equipment is seamless. 

Rather than going with different solutions for each process, having a comprehensive solution with all the features will help your business reduce material wastage and achieve improved efficiency through complete inventory management. 

Looking for a one-stop solution to overcome the inventory management challenges? Find the right partner that will help your business transform the conventional inventory processes. Get started now.