Inventory Management Challenges Faced by Businesses


In today’s ever-evolving economy, it can be tricky for any business to manage its inventory and make wise decisions regarding its functioning. Using a cloud based inventory management system is something several organizations go for these days as a viable inventory platform. We at DSI, for instance, offer one of the best field inventory management system for businesses to manage their inventory efficiently. However, inventory management requires businesses to focus a lot on numbers, quantities, serial numbers, and products, and can holistically pose several challenges along the way.

What are the Inventory Management Challenges a Business Can Face?

So, what are these inventory management challenges faced by businesses? Let us walk through them:

Disruption in Supply

Several events could lead to supply being disrupted for businesses worldwide, such as the ongoing pandemic. Sourcing the products required to prevent stockouts could be delayed due to logistical issues or even production shutdowns. Therefore, businesses need to resort to more robust supply chains to be able to deal with such external factors. 

The disruption in your supply chain is also connected with another issue, which is not having a complete picture of your inventory. Being aware of how many purchase orders you have or when they are expected to arrive, what becomes safety stock, and how much of each delivery goes to the shelves are things you won’t have knowledge of if you don’t have full visibility of your inventory. All of this can be an overwhelming task, which is why having a cloud based inventory management system is always better.

Customer Demand

For every business, the customer base is one of the most crucial features. Customers these days have a wide variety of options to choose from, and being able to stand out among the competition is imperative for a business to succeed. The demands and requirements of a customer keep changing, and a competent business must keep up with those changing needs. 

In order for this to work, inventories need to be restocked without any overstocking or stockouts involved. Therefore, how you manage your inventory and make it flexible can make all the difference, and all of it begins with having a sturdy inventory platform. With cloud inventory management for manufacturing, you will be able to satisfy your customers throughout every season. 

Inventory Shrinkage

Inventory shrinkage takes place when raw materials are listed in records, but are either missing or no longer available. The shrinkage could occur due to reasons such as damage, wrong counting, theft, etc. it could also happen if the supplier charges a company for a certain number of items or raw materials, but fails to ship the correct amount of items. 

The situation of inventory shrinkage can be tackled in a few easy ways. Install a top-of-the-line security system in the inventory, including CCTV cameras, smart locks, and smart doors. Run employee background checks before hiring them, have a separate area for inventory where only a few people are allowed, and check and analyze every item before stocking it in the warehouse so as to save yourself from supply fraud. 


Deadstock is when items remain in the inventory for a long time and are never used or sold. This takes up a considerable amount of space in your warehouse, stopping you from using it for more productive endeavors.

Lack of Time and Resources

Operational challenges and lack of new and emerging technologies are some of the additional issues businesses with an outdated inventory management system could face. Using spreadsheets to analyze data and run reports, for instance, will only slow you down and cost you more time in the process. This is why automation needs to be employed to make your inventory management more efficient.

Choosing a Warehouse Management System for Your Business

While a cloud based inventory management system is necessary to keep your inventory updated, a warehouse management system is essential for businesses to have their warehouse running smoothly. Plenty of factors need to be considered before you choose a warehouse management system for your business. Some of those factors include:

  • The scalability of the system is one of the first factors to consider. This is because the number of users is directly connected to the processing speed and quantity of reports that can be generated every day.
  • The number of users you have for barcode scanners should be considered next. It is important to first understand the level of use your current equipment sees in order to determine how necessary it is to get a scanner replacement. You can then analyze if there are any specific features of the equipment that could be helpful if your business continues to use the device.
  • A business must be aware of the level of support provided by the warehouse management system and barcode scanner manufacturers. Knowing the cost of support provided by independent service providers, too, is imperative while choosing a warehouse management system. 
  • The way a warehouse management systemsupports the growth of your business is another crucial factor to think of before you make a decision. A warehouse management system with efficient scalability can not only manage your current volume, but also take care of any additional volume or other modifications without a significant increase in operational expenses. 

If your business model could require a large number of users, you would have to consider the number of users your warehouse management system is capable of supporting. The ability to enable in-house reporting and processing would have to be considered as well in some cases.

  • The in-house development capability of each vendor must be evaluated before you choose a warehouse management system. The continuous development costs could be amortized by a typical warehouse management system vendor over more than 100 clients. In-house development could be viable in case the overall requirements require specialized integration with existing in-house systems or are particularly specialized.