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What Are the Most Common Inventory Management Mistakes?

As noted by Logistics Bureau, the most common inventory management mistakes include:

  • Carrying excess inventory. Carrying too much inventory will result in higher carrying costs, demand for more warehousing space, and longer times between completing picks.
  • Failure to understand inventory needs. Not understanding inventory needs will result in over-ordering or under ordering, contributing to backorders and upset customers.
  • Lack of optimized picking paths. Optimizing picking paths results in more orders fulfilled, less stress for workers, improved transit times between picks, and more.
  • Using paper-based systems and processes. Deploying technology to track and apply data provides continuous improvement and eliminates the risk of human errors in paper-based systems.
  • Poor housekeeping. Even poor housekeeping can harm the health and safety of your employees, further reducing accuracy in order fulfillment and leading to more excess inventory.
  • Neglecting inbound processes. Inbound processes have a direct effect on inventory levels, and failure to streamline inbound management will result in poor visibility throughout your inventory.

Eliminating Errors Creates Value for Your Organization

Eliminating inventory management mistakes adds value to your organization by streamlining warehouse management and enhancing order accuracy for customers, allowing companies to maintain proper inventory levels and reduce unnecessary inventory. In other words, a better understanding of inventory needs translates into faster order fulfillment through optimized picking paths, application of data to understand inventory, and improved labor management.

Steps to Reducing the Incidence and Prevalence of Inventory Management Mistakes

Retailers should follow a few steps, according to Rod Daugherty of, to reduce inventory management mistakes, including:

  1. Optimize inventory by product.
  2. Create experiences tailored to customer needs and wants.
  3. Enact seasonal adjustments to inventory in both warehouses and brick-and-mortar locations.
  4. Think about external influencers.
  5. Optimize order frequency.
  6. Move products closer to consumers in urban and along major transportation routes, asserts Hattie Hayes of Sourcing Journal.
  7. Use technologies necessary to accommodate dock and yard needs, such as trailer tugs and lifts.
  8. Train staff properly.
  9. Create a safe environment.
  10. Track data to measure and improve performance.