Warehouse Inventory Tracking: The Surprising Mistakes to Avoid (and How to Fix Them)
The customer has ordered 200 units, and you’re already sweating!
Not because the customer has preordered such bulk stock but because you’re short of 60 units.
Yes, 60 UNITS!
The customer doesn’t know that, as your website told him you have it in stock.
Just imagine the level of panic here!
One mistake and your business’s name is at stake!
Who are you going to curse for failing to meet customer demand?
Is your team, warehouse manager, or warehouse management software filled with outdated inventory data?
We’re leaving that to you to answer. After all, you already know how badly inventory tracking errors can affect businesses of any size.
And do you know the worst part? Excess inventory, stockouts, inaccurate data, and inefficient warehouse processes not only mess with customer satisfaction but can also directly impact profitability.
Cheer up! All these can be avoided.
Don’t worry! This guide reveals warehouse inventory tracking slip-ups, their results, and, of course, how to deal with them.
Knowing what you’ve got, where it is, and when you need to restock makes order fulfillment smooth and happy for customers.
Meeting Customer Demand
Your profit depends on meeting your customers’ demands. Effective inventory tracking makes avoiding stockouts and capitalizing on sales opportunities easier.
Making Informed Decisions
With accurate data you can easily make smart choices about your inventory levels, pricing, and promotions.
Mistake 1: Lack of Real-Time Inventory Visibility
The Problem with Outdated Inventory Data
Unfulfilled orders and disappointed customers are enough to damage a business’s profitability. However, outdated inventory data plays a core role here. The only option you’re left with then is backorders. This means your customers won’t get the product on time and will return with dissatisfaction.
Emergency orders might save the day, but that, too, comes with the cost of higher shipping charges and even inferior goods. The whole thing often starts with outdated methods such as manual counting and spreadsheets. Not only are these error-prone, unlike software, but they are also super slow.
How to Fix It: Technology and Process Improvements
This issue can easily fixed with some modern solutions. The first thing you can try out is Barcode and RFID technology. These will automate data entry, assigning unique scannable codes to each item for real-time tracking.
Another lifesaver can be is Inventory management software. Because it acts as a central hub, it integrates with scanners to update stock levels with every transaction. The combination of these two technologies makes it easy for employees to track all stock movements, leading to fewer errors, reduced backorders, and of course, a smoother customer experience.
How Can Managerium Help Here?
Managerium fixes obsolete inventory data with several functions. Your Total Balance, which shows the worth of all your inventory products, gives you real-time visibility of stock updates. This is further divided into:
Opening Balance (beginning value),
Inventory OUT (sold/used),
and Inventory IN (new purchases/production).
Detail-rich reports provide insights.
A Valuation donut chart shows your inventory (raw materials, completed items, etc.), while Coverage Days show how long your stock lasts depending on daily consumption. Managerium shows Item Moving Frequency (fast-selling items) and top transactions by value.
Finally, the Inventory Turnover Ratio measures inventory efficiency. This data-driven method lets you maximize stock management with educated judgments.Â
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Mistake #2: Inefficient Warehouse Layout and Processes
Inefficient layouts create chaos. Imagine pickers trekking long distances for frequently ordered items or struggling with unclear labeling. These scenarios lead to wasted time, higher labor costs, and a higher chance of picking errors.
And the result? Slower order fulfillment and frustrated customers. Just imagine what could happen if this problem were combined with outdated inventory data. Without accurate stock levels, you can’t optimize your layout. And the worst part? You don’t even know what needs optimizing!
How to Fix It: Optimize Layout and Workflows
Optimizing based on data is the key to a well-kept area. You can use methods like ABC analysis to fix the issue. This sorts things into groups based on their value and demand, which helps place them the best.
By looking at sales data, you can find things that are bought frequently and then group them together to reduce picking travel. Labels on bins and shelves must be clear and uniform to make things easy to find and get. Lastly, choose efficient tracks and reduce walking and going backward.
How Can Managerium Help Here?
Managerium helps you with analyzing sales trends and stock levels. So you can easily identify your high-demand items and optimize your warehouse layout accordingly. What else do you need to ensure optimal inventory levels?
Mistake #3: Neglecting Inventory Cycle Counting
Think of the annual inventory count. Isn’t it simply a mixture of stressful shutdowns and long hours spent poring over stock? But this so-called traditional, year-end approach doesn’t come without limitations.
Firstly, it leaves you with outdated data for most of the year, making informed decision-making next to impossible. Secondly, it disrupts warehouse operations, cutting off efficiency. And customer satisfaction? You can forget about that.
But what’s most concerning is a yearly count doesn’t identify the root cause of inventory errors. In the meantime, the risk of stockouts pops up due to underestimating inventory. And sometimes, overstocking comes in due to inflated figures.
And the result?
Wasted time in fixing up those imbalances. Plus, the hidden shrinkage or theft remains unnoticed for a long period of time.
How to Fix It: Implement Cycle Counting
Cycle counting is a smarter way to do things that always work out right. It lets you do regular counts throughout the year, so your office operations aren’t interrupted too much.
This constant method ensures that data stays up-to-date and accurate, so you can always make choices based on true information. But cycle counting is more than just ensuring inventory accuracy.
By looking at differences, you can find weak spots in the process that lead to counting mistakes. The sales and inventory reports help you decide which things to count first based on their value, how often they are sold, or other important factors.
Remember to pay attention to more valuable items (ABC Analysis). Plan regular counts throughout the year instead of depending on ad hoc numbers when problems appear.
This proactive method cuts down on stock-outs and overstocks and lets you find the source of mistakes and fix them for long-term improvement.
How Managerium Can Help Here?
Managerium makes it easy to count cycles. Plan your numbers based on what you need to do. Give more attention to high-value items (ABC analysis) or items that don’t always match up. The method lets you make cycle count lists right away in your day-to-day operations.
Managerium shows you differences and gives you thorough reports to help you figure out why they happen. Lastly, make changes to your product and learn from past data to get the most out of your warehouse operations. Cycle counting with Managerium is powerful because it always ensures accuracy, causes less trouble, and gives you useful data.
Mistake #4: Inaccurate Inventory Forecasting
Imagine that your building is full of things that haven’t been sold—a graveyard of goods because you didn’t make accurate predictions. This terrible scenario of having too much inventory wastes money that you could be using elsewhere and drives up the cost of storage. Even worse, some goods may become “deadstock,” which means they are no longer useful or can’t be sold, wasting money and time.
The other side is below-stocking. Think about a customer who really wants to buy a famous item but can’t because the shelves are empty. Customers will be unhappy, and your image could be hurt if you miss sales chances like this one. This is especially true if stock-outs happen often.
But the problem is more than just these clear effects. When predictions are wrong, they cause a chain reaction. Suddenly running out of stock causes rushed orders, which puts pressure on relationships with providers. When you’re scrambling to meet sudden changes in demand, you end up allocating workers inefficiently, which we believe is not in inventory management strategies.
Data-Driven Forecasting: Beyond Spreadsheets
Standard spreadsheets can’t handle big data sets or outside factors like sales and patterns. To make predictions, you need efficient warehouse inventory management software. It will look at past sales data, find trends, and even take outside factors into account.
This lets you correctly guess what customers want, prevent your warehouse space from filling with dead stock, and avoid understocking, which leads to unhappy customers. Plus, based on historical sales data, software solutions like this ensure you have the right supplies to meet customer needs, make the best use of your resources, and keep good ties with your suppliers.
How Managerium Can Help Here?
Managerium uses your past sales data to find patterns and cycles. Imagine being able to automatically tell when shoppers will buy a lot of summer swimsuits or gifts for the holidays. It doesn’t end there, though. Statistical models are used to analyze this data, which gives a clear picture of future demand.
For an even more complex method, Managerium lets you include outside factors that could affect your sales. It makes accurate inventory predictions by taking all of the relevant factors into account. Doing this ensures you have the right goods on hand to meet customer needs and keep your entire inventory at the right level.
Best Practices for Warehouse Inventory Tracking
Cycle Counting Process for Accuracy: Make cycle counting a non-negotiable part of your routine. Schedule counts based on item value or turnover rate, and use software like Managerium to streamline the process.
Minimizing Excess Inventory and Dead Stock: Accurate demand forecasting is your best defense against overstocking. Regularly review your inventory for slow-moving items and implement strategies to clear them, making space for high-demand products.
Efficient Packing and Shipping Process: Ensure your inventory management system is integrated with your shipping solution for seamless updates. Double-check each order before it leaves the warehouse to avoid costly returns and protect your customer relationships.
Overcoming Challenges in Warehouse Inventory Tracking
Fluctuations in Demand and Supply Chain Management Disruptions: Calculate appropriate safety stock levels based on previous data and supplier lead times. Utilize the forecasting tools in Managerium to stay ahead of demand shifts and make your warehouse management systems better.
Optimizing Warehouse Layout and Processes: Analyze your sales and inventory reports in Managerium to identify bottlenecks and inefficiencies. Even without dedicated layout tools, accurate data is the foundation for improvement.
Fixing Storage Costs and Holding Inventory: Identify high-carrying cost items in Managerium. Improve forecasting by ensuring real-time inventory tracking. This will minimize overstocking and take a proactive approach to liquidating slow-moving inventory.
The Benefits of Effective Inventory control and warehouse management systems
Customer Satisfaction: Always have the right products in stock to fulfill orders quickly and reliably.
Cost Control: Reduce carrying costs, minimize stockouts, and prevent the need for costly emergency orders.
Data-Driven Decisions: Make the insights in Managerium useful to make informed choices about pricing, promotions, and inventory levels.
Don’t let mistakes in your inventory management solution stop you from succeeding. Get our Essential Inventory Management Checklist right now and start making your business run more smoothly with Managerium. Click here to get a FREE demo right now.
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