As an evergreen aspect of supply chain management, inventory management is a critical task for company-owned warehouses as well as 3PLs. Inventory management requires professional attention because any error or discrepancy in the same can result in large financial losses as well as hamper the ability to scale operations.

While minor inventory errors do occur in any warehouse, a slight spike in inventory management problems can turn into an expensive affair and, in cases like healthcare, could even cost lives. Warehouse managers need to ideally eliminate such errors using the right set of practices and technologies.

4 Inventory Management Problems and How To Avoid Them

Below are some causes of inventory discrepancy that supply chain stakeholders should take special care to avoid:

#1 Misplaced Inventory

The equation here is simple – if you can’t find the right inventory, you cannot fulfill customer demand. Correcting inaccurate inventory counts wastes valuable time and resources, thus adding a huge dent to warehouse efficiency.

Misplaced inventory stems largely from the unavailability of a good inventory management system or a WMS in place to track the movement of inventory. It is equally important to have a well-trained staff that can handle the inventory with minimal errors.

#2 Obsolete Stock

Irrespective of size, inventories occupy precious warehouse space. That is why it is essential that the inventory generates a decent ROI in return. If the inventory takes up shelf space for a long period of time, it brings down the bottom line, especially at large DCs in or near urban areas.

Obsolete stock is generally a result of incorrectly predicting the consumer demand, thus not moving from the shelves and into the hands of consumers. Integrating with an automated inventory or warehouse management system, which can provide real-time insights into the inventory lifecycle and consumer demand can help resolve this problem. Another immediate solution is scanning inventory frequently, to map out the discrepancies in the movement of inventory into/from the warehouse.

#3 Infrequent Inventory Counts

Inventory Management ProblemsTraditionally, warehouse managers used to halt operations for days to manually conduct wall-to-wall counts. While this procedure may have worked in the past when the customer fulfillment demand and velocity wasn’t too high, this is an inefficient and costly practice in the e-commerce age, when consumer demands are skyrocketing, thus requiring high dynamism in supply chain operations.

High-frequency cycle counts are proving to be a relevant practice in modern warehouses, wherein inventory is systematically scanned often to ensure maximum accuracy and minimum discrepancies.

Relying on manual inventory scans is not the best way to conduct cycle counts, keeping in mind the time and cost it takes to do so. This is where autonomous technologies are turning out to be the best alternative.

#4 Not Embracing Automation

drones for inventory countingThe best time to embrace smart WMS was a decade or two ago. Warehouses that still rely on manual inventory data entries end up wasting time, effort, and money on tracking and fixing errors, given that human errors are unavoidable.

Not just a smart WMS, but technologies like Automated Guided Vehicles (AGVs), Automated Storage and Retrieval Systems (AS/RS), IoT Sensors, Autonomous Drones, etc., are proving to be highly productive for warehouse operations. You can read more about these technologies here.

As an example of how inefficient inventory management can hurt business, Nike suffered a loss of around $100 million in sales due to a lack of inventory control. Following the fiasco, Nike’s stock price plummeted by 20%. Fortunately, they were able to bounce back by using a better inventory management system. (Source)

It is safe to say that effective inventory management is a non-negotiable aspect of warehouses. Any compromise on embracing technology to minimize or eliminate the common errors can prove to be detrimental in the long run. With the technological advances in image processing, object recognition, computer vision and AI/ML, there are plenty of solutions to poor inventory management.

What’s Next?

FlytWare is one such solution that helps warehouses address inventory management challenges. FlytWare’s fleet of autonomous drones can accurately and aerially scan inventory locations in an efficient manner, and provide a comprehensive report for the same by integrating with the WMS for variance analysis.

Sounds like a good fit for your warehouse/distribution center? Feel free to contact us at

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