Inventory management isn’t just as simple as monitoring the supply and demand of your products. You’ll also need to navigate the complexities of space management, perishability, scheduling, assembly and delivery to ensure customer satisfaction.
All through the process, you’ll come across challenges unique to the industry you’re in. But by anticipating these challenges, you can plan and overcome inventory problems.
General inventory challenges
Overstock/understock
It’s not easy to predict customer demand. So when it comes to managing your inventory, you might think it would be better to increase your stocks more than what’s necessary. You might also encounter cases where demand exceeds your store’s supply.
Overstock takes up space that could be used for products that could’ve been sold; you end up burning cash that cannot be taken back (from making too much of one product to paying for excess inventory space). On the other hand, understocking leads to missed sales opportunities from stockouts.
Bad forecasting
Maintaining a balanced inventory level is all about providing what your customer needs at the right time and understanding why they buy your products. With fast-changing consumer behavior, you must have all the tools to predict your customers’ demand and avoid the consequences of being overstocked or understocked.
Inefficient tracking
Aside from predicting demand, entrepreneurs must also watch for their supply. Whether you’re manufacturing your products or sourcing it from other businesses, having full visibility on your products’ availability and condition in warehouses leads you to make sound decisions and prepare in advance.
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Inventory management challenges in the 3 major industries
Inventory management challenges occur due to the nature of the products or customer behavior in a specific industry.
Apparel
The emergence of fast fashion has compelled entrepreneurs to predict the next fashion trend to prepare for it – fast. It’s also crucial for them to move quickly as trends come and go. When the fad dies down, this leaves businesses susceptible to surplus items. So they resort to markdowns and clearance sales just to get excess items off their inventory space.
Logistics also play a big role in the success of the apparel industry. The fast-changing nature of fashion trends requires the logistics aspect to work and deliver fast before prices change or before the demand for it dips.
Retail
For retailers, limiting stocks for lack of inventory space is never an option. Retail customers often look for variety, so entrepreneurs expand their product category and even open new branches. The result is a greater need for more inventory space, leading to higher costs for maintaining these spaces.
Demand for some items can also be seasonal. Retailers must predict their customers’ behavior to avoid overstocking and understocking.
Additionally, a retailer may also find themselves overwhelmed by managing multiple branches and online stores. To navigate this, they require omnichannel visibility about the sales and inventory movement of their products so that they’ll be timely in making inventory-related decisions.
F&B
Businesses in the F&B industry is at greater risk when overstocking since much of their inventory is perishable. Understocking leaves them vulnerable to customer dissatisfaction.
Apart from predicting customer demand, entrepreneurs also need to navigate through predicting delivery schedules. Time is of the essence when dealing with perishable goods after all.
How to overcome inventory problems
Luckily for entrepreneurs, technology makes everything easier.
To track your products’ stocks, create SKU numbers for your products. SKUs allow you to also monitor your sales data and streamline your order fulfillment processes.
Many inventory management solutions help minimize errors and offer a centralized system for entrepreneurs to manage their inventories. This is especially crucial when dealing with multiple branches and physical stores.
Ideally, you’d want one app or software that connects all your online stores and syncs data in real-time from your physical stores and warehouses that can help you collect the right insights. Some may even offer industry-specific inventory solutions.
Having such data collected on one screen also helps you monitor and predict consumer behavior so that your products can be ready before your customers realize they need them.
Additionally, businesses also need to ensure the vendors and suppliers they partner with can understand the nature of the business. An effective communication plan between your business and your suppliers is key to ensuring adequate inventory, allowing you to meet customer expectations.
Competition is tight, especially in apparel, retail and F&B. No one wants to see their customers go to the competitor for the same item just because they weren’t able to restock fast enough.
How Ninja Restock can help you
Your inventories must be filled with the right products at the right time. Partnering with the right logistics provider that can deliver stocks between warehouses or stores on demand allows you to never miss out on trends and sales opportunities.
What’s more, a good inventory transport solutions provider should offer flexible options for all kinds of businesses. With Ninja Restock, we can ensure your supply chain flow remains seamless and efficient while we keep your costs low.
Deliver your goods fast and expand your reach nationwide with Ninja Restock today.
