Inventory Inaccuracy in Warehouse

Inventory inaccuracy is a critical challenge in warehousing. It leads to mismanagement, stockouts, or overstocking, which are major problems. Stockouts result in missed sales opportunities and disappointed consumers. Similarly, overstocking affects storage capacity and increases organizational and storage costs unnecessarily. Overstocking inventory also eats up the working capital of a business.
Here, we investigate the reasons and results of inventory inaccuracy and how 3PLNext’s software can solve this issue.
Reasons for Inventory Inaccuracy
There are several causes for the mismanagement of supply. We have categorized them as five main reasons.

1) Human Errors: Manual data entry during receiving, counting, picking, and packing can result in errors and disparities between actual and recorded supply levels.

2) Misplaced Stock: Item misallocation and poor stock management can cause disorganization and chaos within the warehouse, making it difficult to find items in their respective storage places.

3) Theft: Theft, robbery, or the unauthorized removal of items from the warehouse by employees leads to inventory losses, which might go unnoticed, causing a shortage of products.

4) Supplier Mistakes: If not properly handled, incorrect shipments from suppliers, such as wrong quantities or damaged items, can affect supply records.

5) System Integration Failures: Lack of communication between different systems, such as WMS, can cause data mismatches and errors.

Results of Inventory Inaccuracy

1) Surpluses and Shortages: Inaccurate inventory records can lead to surpluses and shortages. Surpluses are difficult to manage and require significant storage space, while shortages result in missed sales and profit losses.

2) Increased Operational Costs: Handling supply mismatches and disparities requires effort and resources, increasing overall costs.

3) Incompetent Order Fulfillment: Incorrect inventory data can cause delays in order processing and fulfillment, resulting in much longer delivery times and annoyed consumers.

4) Poor Decision Making: Incorrect supply information affects decision making and proper planning related to production and sales.

Solutions for Inventory Inaccuracy

3PLNext’s fulfillment management system addresses the root causes of inventory inaccuracy with a comprehensive approach.

Staff Training: 3PLNext supports in-depth training programs to ensure that warehouse employees are well-trained to perform tasks and manage supply, minimizing human errors such as discounts, etc.

Centralized Supply Management: 3PLNext’s centralized inventory management system integrates data from different systems, ensuring consistent stock records.

Automated Data Capture: Implementing barcode and RFID scanning technology provides automated data updates on supply movement.

Secure Access Controls: These ensure that only authorized personnel can access records and specific stock areas within the warehouse, reducing the risk of fraud.

Improved Supplier Collaboration: 3PLNext boasts automated systems that check received items against purchase orders to address any mismatch immediately.

Advanced Tracking and Analytics: 3PLNext’s advanced analytics and tracking enable warehouse staff to monitor supply levels and accurately predict future stock requirements, reducing surpluses and shortages.

Integration with E-commerce platforms: This enables synchronization of supply data across all channels and prevents inaccuracies while using multiple systems.

Inventory inaccuracy causes several problems in warehouse operations. It adversely impacts efficiency, buyer satisfaction, and profitability. 3PLNext’s fulfillment management system provides the ideal solutions to enhance inventory accuracy and restrict human errors, disparities, stock-outs, shortages, and surpluses.

Ahmed Sufi