As an omnichannel retailer, fulfilling as many orders as possible is imperative to success. Always having the right product available to your customer on every channel boosts your stock and helps build a loyal following. Similarly, every delayed or botched-up delivery is a black mark, and those tend to pile up via negative word-of-mouth.

Great order fulfillment requires you to have tie-ups with dependable courier services or dropshippers, an up-to-date, synchronized inventory, rapid packing, pickup, and dispatch. If you have multiple and strategic warehouse locations that make it easy to access your customer base, that’s a big plus. However, managing inventory effectively becomes your next challenge to address.

Here are 7 common inventory problems and solutions on overcoming them:

  1. Supply chain complexity

    With a hazier international trading scenario and tough competition among e-tailers, small and medium businesses are being forced to adapt by:

    • Making supply chains more complex. More the number of partners, less reliable lead time in shipping a product and more tracking issues
    • Expanding product portfolios to offer more choice, putting pressure on warehouse space and inventory processes.
    • Increasing stock levels to ensure availability at the risk of investing more working capital than is wise.

    There are, fortunately, a few tried-and-tested ways to maintain a consistent supply chain. You can overcome these inventory problems in the following ways:

    • Lead time, i.e. the amount of time it takes to fulfill an order is crucial. When you factor in you vendors’ lead time, it helps significantly. So does keeping an eye on holidays, weather conditions and anticipating other possible delays.
    • Maintaining safety stock. This is a useful cushion to fall back on in case of shortages or delays in restocking.
    • Investing in automated inventory systems. Eliminate manual errors and maintain accurate stock via real-time, automated updates. Use barcoding systems to keep track of SKUs.
    • Using a multi-location stock management software that will suggest redistributing inventory as per demand. This ensures you use the stock you already own, saving money on unnecessary POs and helping optimize available storage space.
  2. Inadequately and improperly trained employees

    No matter how great your software or how well-automated your system, there is a critical human element to managing inventory. Poorly trained employees who do not understand your inventory system, or who do not know enough to rotate inventory can be a liability.

    We recommend having at least one person who is well acquainted with your inventory system and can train new employees, oversee the warehouse and shipping operations. This person should be experienced in handling inventory problems. An inventory manager should fulfill the following tasks:

    • Identifying shortages or the probability of running out of stock, before it happens
    • Conducting regular stock audits
    • Reporting on the levels of inventory
    • Calculating how much stock to order and raising purchase orders
    • Use inventory management methods to optimize its procurement and use
    • Educate warehouse staff on correct inventory handling
    • Forecast how much inventory you may need at that particular facility in the next order cycle
    • Properly training your employees on your company procedures will shorten your lead time. This will save you a bundle downstream, and build you a brand appreciated for efficiency.
  3. Not enough of a game plan for the future

    Getting sucked up into day-to-day operations and losing track of the big picture is an easy trap to fall into.

    You can, and should, delegate tasks to relevant people. Not doing so only piles up your platter and makes you inefficient overall.

    Many retailers start out small, and when the time comes to scale up, they are not amply prepared. While it is true that your retail adventure may have started in a basement, it isn’t there any longer and neither should your systems and processes. In fact, plan for growth and plan your operations around the idea of growth. This way, you are always ready to handle every eventuality.

  4. Not Counting Inventory Often

    Even the best-automated inventory management system may have a few errors, typically introduced when un-trackable inventory such as pilferage, or exchanges are not entered. Therefore, you need to schedule frequent stock audits.

    If various sections of stock are checked on a regular basis, you can be assured that your system numbers are pretty close to actual numbers. Scheduled checks coupled with barcode scans are a must, say, of one section per day. Choose days when you have sufficient staff available for counting. You can read more about stock counting here.

  5. Not Using Automation

    Several businesses are still stuck in the Stone Age, one-store-specific, Excel-based inventory management. This can spell certain death if they do not scale up or automate rapidly while going online or omnichannel. Not only is it obsolete, tedious and time-sucking, but the sheer potential for human errors is also staggering.

    Automating your systems is paramount where:

    • You have multiple stores or warehouse locations
    • Your brick-and-mortar channel will soon expand into other, online channels
    • You have a limited budget and a hiring ceiling

    Automating allows employees to track SKUs across all your store and warehouse locations while monitoring orders, returns, exchanges, shipments for all your items. That too in real-time. Automation also makes it easy to perform routine tasks like generating barcodes, invoices or purchase orders.

    If you name your products and SKUs correctly, you will be able to standardize inventory management to a great extent. Team members will not have any confusion. Note that there is a difference between SKU codes and barcodes, which is important to know. Primaseller has a great resource in inventory management.

    When choosing an inventory management system, go in for one that is consistent across all your sites, and of a company that offers customized training and support.

  6. Not using good vendors

    This may seem like a no-brainer, but it is also a very common issue. Finding a good vendor is a fine balance between someone who is consistent and someone who doesn’t also charge a bomb.

    Luckily, there are several review websites today where you can find genuine reviews of a vendor before opting to go ahead with them. Also, if a certain vendor does not meet your quality or service standards, or delays shipments and affects your inventory management, drop them like a hot potato!

    If you sell a niche product, consider complete vertical integration so that you have control over manufacturing, demand and theref0re your inventory levels.

  7. Not having performance measurement parameters in place

    Measure tangibles as well as intangibles to prevent inventory problems. Customer satisfaction ratings, inventory turnover or even just your working capital are all important. Product managers should monitor daily fill-rates, and inventory turnover based on your sales cycles.

    Having powerful reporting can really help you here. Inventory reports give you a quick overview of how you’re performing and this helps you fix problems well before they become headaches.

Author Bio: Sandra Rosen is a tech geek who has worked with some corporate houses before settling in Ocala, Florida with her husband and two dogs. She enjoys writing for several publications and online portals and expresses her views on the latest technology, Digital Marketing, Affiliate Marketing, e-commerce, and small businesses. Now she has written the content for free infographic maker. Her other interests include gardening and online shopping.

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Armed with a degree and a pen, loves to tell stories. When not telling stories, she also works. Hard to decide which one she likes more.