What Are The Common Problems In Inventory Management?

4.5
What Are The Common Problems In Inventory Management?

Knowing the common issues that businesses have with inventory management is key in working towards a solution. Here, we discuss just that.

What Are The Common Problems In Inventory Management?

Getting products to your customers on time is what keeps your business moving forward. When there are delays and other issues happening, or when you struggle to meet demand, it spells bad news for your business. Understanding what is slowing you down and how to resolve those problems will help you meet those challenges head on—and succeed. What are the common problems in inventory management? Let’s find out.

The Common Problems in Inventory Management

Struggling to figure out why you’re running into obstacles? You’re probably dealing with one or more inventory management issues.

Knowing the common issues that businesses have with inventory management is key in working towards a solution. Thankfully, there are systems designed to fix inventory management challenges. The solution to all these problems will be described further below.

Inputting Information Manually

There are many reasons why more businesses are turning to Warehouse Management Systems (WMS) and Enterprise Resource Planning (ERP) systems, but one trumps them all: Manual data entry is off-putting and insecure. Whether you have one warehouse or several, attempting to manually enter the data for inventory, orders, shipping, reports, and finances is going to cause chaos.

Point of sale (POS) systems can help ease the burden, but what you’re really going to need is an ERP that can put all the information from the warehouse, supply chain, inventory, finances, and more into one place. That will increase communication between departments and eliminate human error.

Not Counting Inventory Often Enough

Even the best warehouses can have erroneous data due to a lack of stock audits. Exchanges and returns, for example, may be counted incorrectly, resulting in misinformation about stock. You need to check your stock on a regular basis. Without barcodes and scanners, this can be overwhelming for employees.

Your warehouse would benefit from a centralized inventory tracking system that integrates with your RFID or barcode scanners.

Under- or Overstocking

Having too little or too much stock is a problem that results from poor control over inventory sourcing. Both have an impact on cash flow and can result in lost profits when inventory goes bad. Likewise, constantly running low means that your business could miss an opportunity for a greater number of sales.

Foregoing Automation

Gone are the days when managing your inventory through Excel was doable. Using outdated programs that don’t scale will cause problems in the future, and that can cause delays and dissatisfaction. That is why you need to automate certain processes within your warehouse.

Automating warehouse management is truly useful when:

  • You want to be able to look at the details of all warehouses and business locations for a single dashboard
  • Your brick-and-mortar location needs to seamlessly go online and connect with other channels, applications, and systems, such as a cloud Warehouse Management System
  • You need help to manage a warehouse because of a limited budget or staffing shortage

There are many ERP systems, like SAP Business One, that utilize automation. With the program, you can automate how employees scan and track SKUs and barcodes throughout the store or warehouse. This makes tracking orders, shipments, and returns much easier. Furthermore, automation reduces confusion and redundant tasks, because it automatically tracks what has been done.

Not Measuring Your Business’s Performance

Being able to measure various parameters, such as the amount of stock, customer satisfaction ratings, working capital, and sale cycles can tell you much about your business. Yet, you can’t do that without high-powered reporting software.

Putting Inventory in the Wrong Spot

When you don’t have a way to manage your inventory, items will be placed in the wrong spot. When this happens, the wrong items could be pulled for shipments. The supply chain gets disrupted. Customers are upset. Therefore, inventory needs to be put in its proper place every single time.

A Solution For Common Problems in Inventory Management

Many of the common issues with inventory management can be amended with an Enterprise Resource Planning (ERP) system like SAP Business One. An incredible solution that was originally designed for small and medium-sized businesses, SAP Business One is a comprehensive suite of convenient tools that make running a warehouse easier than ever.

SAP Business One includes modules that will assist your business with inventory management, warehouse management, finances and accounting, production, sales, and more.

Here is an example. The SAP Business One Inventory Management module allows you to edit the master data for an item, set the item location, and then track that item whenever it is moved or starts to run low. That data is shared between the administrator, warehouse manager, and even the employees who are picking, pulling, packaging, and handling those shipments.

You can also use SAP Business One to analyze data and make reports. Using that data, you have advanced forecasting abilities on what will be going out of stock soon.

Benefits of SAP Business One in inventory management include:

  • Multi-bin functionality
  • Inventory tracking
  • Cycle counting
  • Pick and Pack tool
  • Record receipts and issues; track stock transfers
  • Manage warehouses with serial and batch numbers
  • Generate lists of items, valuation reports, and transactions
  • More visibility between warehouse locations and the whole supply chain

As you can see, common problems in the warehouse or business can be mitigated or even fixed completely when you have SAP Business One implemented.

Bottom Line

SAP Business One is the ultimate solution for common problems in inventory management. Designed for businesses both small and large, SAP Business One has scalable features that help automate and streamline inventory processes. Once those problems are solved, your productivity, efficiency, and profits will surely increase.