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Did you know that 72% of retailers are planning to revamp their supply chain, and this shift is set to reshape the retail landscape? But what’s driving this ambitious feat? The answer is the real-time visibility of inventory driven by automation and cutting-edge technologies.  

Efficient inventory management is the essence of a successful e-commerce business. It is vital to have your back-end e-commerce processes in place for a good front-end experience. Rising competition in the e-commerce industry has also led businesses to adopt and embrace advanced technologies to sustain and thrive in the market. 

But before retailers can think of implementing these advancements, they must first address critical inventory management challenges. So here are the common challenges with proven solutions for efficient inventory control.

Top Challenges & Solutions of Inventory Management – 

While there are many problems faced in inventory management, here are the top challenges and solutions to overcome them.
top challenges of inventory management

1. Lack of Real-time Inventory Visibility

This is one of the biggest challenges in inventory management. As a business, you need to know the real-time status of stocks in your inventory. No matter where the goods are, you must keep a keen track of them. Poor inventory monitoring leads to delays in shipping and delivery of stocks, unnecessary shipping costs, and a lack of inventory balance. 

How can you solve it? 

Real-time Inventory Management System: This tells you exactly where your goods are. Additionally, it will also give your closer insights into the availability of stocks at that moment. Check out how The House of Rare achieved 360-degree visibility of inventory with a robust inventory management system.

2. Overstocking and Understocking

Overstocking happens when a business holds excessive inventory, tying up valuable capital and storage space. At the same time, understocking occurs when inventory levels are insufficient to meet customer demand. Research shows that reducing stock-outs and overstocks can lower inventory costs by 10%.

How can you solve it?

Effective Demand Forecasting: The key to tackling overstocking and understocking is leveraging sophisticated analytics and reports dashboards that can help you gain a better understanding of your data and keep track of upcoming events while checking the needed inventory levels for the future.

3. Redundant Manual Procedures

Tracking your inventory with basic manual procedures can lead to errors in managing goods. Also, manual picking, packing, and shipping processes can slow down order fulfillment which can lead to delayed delivery and hamper customer satisfaction. 

How can you solve it? I

Invest in Cutting-edge Technology Solutions: To address this challenge, businesses should invest in modern technology solutions such as inventory management, warehouse management, and multichannel order management. Automating the procedures will make it easier to track and report on the availability of the goods.

 4. Recognizing and Tracking Obsolete Products 

It is common for some products to become obsolete after their demand significantly drops. Unfortunately, these obsolete goods are often left abandoned in warehouses and forgotten when their need arises. At such times, inventory managers may end up ordering new products that leave the old stock unused, resulting in a loss. 

How can you solve it?

Stock Control Systems: This system is useful in hunting the dead inventory and using them when required. Expiry management and stock rotation methods like ‘First In First Out’ (FIFO) or ‘First Expiry First Out’ (FEFO) ensure that older inventory is used before newer stock. This helps prevent stockpile accumulation and ensures that products are consumed in the order they were received.

Discover how the Urban Company was able to minimize the dead stock and achieve 8X sales order growth with comprehensive reports and a dashboard. 

5. Understanding Demand and Volatility 

Understanding demand and volatility is essential for e-commerce businesses in today’s dynamic markets. Demand for goods can be uncertain and depends on various factors like season, geographic location, and market trends. A pertinent example would be the COVID-19 pandemic due to consumer behavior toward products being volatile. Additionally, market trends also vary. This can lead to a shortage of goods when the demand rises or excess stock when the demand is low. 

How can you solve it? 

Comprehensive Reports and Dashboard: Using advanced inventory management software equipped with comprehensive reports and a user-friendly dashboard can analyze real-time data. This will enable businesses to predict demand and enhance their forecasting accuracy precisely. Having access to up-to-date and accurate information empowers businesses to make informed decisions and promptly adjust their operations to meet changing demand patterns.

6. Lack of Integration with Sales Channels

In today’s omnichannel retail environment, businesses often sell their products through various sales channels, such as online stores, physical stores, marketplaces, and social media platforms. Each of these channels may have its own inventory tracking system, which can lead to discrepancies and inconsistent updates across different channels. For example, if a product sells out on one platform, but the inventory is not updated on another, there’s a risk of overselling, which can result in canceled orders and unhappy customers.

How can you solve it? 

Centralized Inventory Management System: Implement an integrated inventory management system that synchronizes inventory levels across all sales channels in real time. This ensures that inventory data is accurate and up-to-date, reducing the risk of overselling and helping to meet customer demand more efficiently. 

7. Handling Perishable and Fragile Stock

Certain products, like perishable goods (e.g., fresh produce, dairy products) and fragile items (e.g., glassware, electronics), require special handling and care during storage and transit. These items have limited shelf lives and are susceptible to damage, making it crucial to track their conditions and use them before they expire or become damaged.

How can you solve it? 

Efficient Expiry Management System: To effectively manage perishable and fragile stock, businesses should implement an efficient expiry management system. This involves clear product labeling and sorting, adhering to the first-in-first-out approach, real-time monitoring of storage conditions, automated alerts, and ensuring stock visibility through the inventory management system. 

Check out how The Man Company seamlessly achieved minimal expiry and spoilage by implementing expiry management methods, including FIFO and FEFO.

Let’s Make Inventory Management Easier!

Efficient inventory management system is essential for the success of any retail business, especially in today’s dynamic business landscape. Also, with rising competition in the e-commerce industry, it is essential to have all your e-commerce back-end automation aspects in place. Rather than hunting for each service individually, it is wise to implement a full-stack solution that fulfills all your e-commerce automation needs in one place. With the right strategies and technology in place, businesses can navigate inventory challenges and stay ahead in an ever-evolving retail world.

See how to configure, manage and execute complex order routing processes effectively and efficiently with an e-commerce inventory management system –

Unicommerce offers a wide range of e-commerce solutions like Warehouse Management System, Inventory Management System, Multichannel Order Management Solutions, Full-stack D2C E-commerce Platform, and Omnichannel Retail Solutions. Unicommerce offers simplified solutions for e-commerce inventory management and ensures the top-notch performance of your business by empowering you to overcome inventory management challenges.

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