Why Supply Chain Managers Are Pushing For Better Inventory Control

4 min read

According to surveys, the cost of bad, dirty, incorrect, or missing supply chain data causes losses of around $600 billion each year. Supply chain managers are pushing for better inventory control to reduce these losses.

What happens when you’re not diligent with your inventory data?

Keep reading as we explore what the unintended and pernicious consequences of inventory errors are, and how to remedy them by implementing a better inventory control system.

Supply Chain Managers

What Happens When Inventory Errors Occur?

Inventory errors can be a wounding nail in the foot for your business, and it’s in your best interest to cover all your bases. Here’s what may happen if you fail to take action regarding your skewed inventory management processes.


Stockouts occur when you can’t fulfill orders made through your online system promptly due to a lack of supply. They can happen due to mistakes in the stock count or due to inventory shrinkage caused by theft or misplacement.

When a stockout occurs and you’re unable to fulfill orders as a customer typically expects, you may need to issue a refund and lose the sale. Not only will you lose the sale, but you’ll agonizingly lose the customer’s trust, too.

On a smaller scale, this may seem like a meager incident. However, if it keeps occurring, you will undoubtedly lose more customers and more revenue as a result, chipping away at your quarterly and annual profits, which could leave the business in a particularly strained spot.

If customers leave negative reviews on your business page after their order isn’t fulfilled, this will harm your reputation and turn off potential customers checking out your business’s trust rating before making a purchase.

In other words, repeated stockouts can have a truly devastating effect on your company’s reputation.


Overstocking doesn’t seem too bad when you consider the consequences of stockouts. However, it can cause equally significant losses when left unaddressed. When you overstock an item, you could purchase far more inventory than you’ll likely sell. When this happens, you’ll experience the following disadvantages:

  • Wasted resources: When you purchase stock you can’t sell, you may as well be using money as napkins. The stock will sit on your shelves, and you won’t profit from it. If you’ve spent a significant amount on the stock, you’ll have lost more money. Making wise stock decisions is integral to a functional inventory control system.
  • Overpaying for inventory storage: If items are forgotten in your warehouse, you’re wasting valuable real estate. Every month, when the bills roll around, you pay for a service you don’t use. Small mistakes like this can leech a business’s finances over time and contribute to poor business health.

These ugly consequences are something many e-commerce and warehousing companies neglect to consider when assessing how they can improve the financial health of the business at large.

How To Implement a Better Inventory Control System

Where do you start when crafting an e-commerce management system that provides consistent accuracy and reliability? Investing in tools designed to assist with inventory management is a great place to start. Here are your best options.

Inventory Management Software

Inventory management software is a tool that ensures your sales order, inventory, and pending inventory data are all stored on a single, unified platform. This type of software performs the following functions:

  • Automating reorder points: With inventory management software, you can set reorder points for your products. When you’re running low, the tool will automatically purchase more stock before you run out, eliminating the possibility of stockouts.
  • Data unification: An inventory management tool will automatically update your stock numbers in line with pending and fulfilled sales orders. This means your warehouse and web management staff won’t become confused when orders are pending completion.
  • RFID tracking: Manual stock counting leaves a drastically huge margin for human error that could cause some troubles. Inventory management software uses RFID tracking to help automate the scanning process. When performing stock counts, warehouse staff must simply scan the barcode to count the inventory items. Once they have scanned an item, it cannot be scanned twice – eliminating overcounting entirely.


One of the most duplicitous enemies of your inventory control strategy is the potential for inventory shrinkage caused by theft. So, you install security cameras. Who will be monitoring them? If you’ve not got eyes on your inventory, someone could still get away with stealing it.

Investing in smarter security will provide ample insight into security threats in your warehouse without increased effort from you and your team. Here are some of the top security tools to invest in to prevent inventory shrinkage due to theft:

  • AI security cameras: Since your team will have duties that render them unable to watch security cameras all day, you’ll benefit from cloud-based security servers with AI integration. AI uses behavior and object recognition to spot security threats, such as sharp objects, or to identify when your inventory leaves the building. If you typically ship goods out at a particular time of day, and inventory leaves the warehouse outside of these hours, you can investigate the AI alert to identify theft.
  • Access control: Investing in a biometric access control system prevents an unauthorized person from entering the premises using a stolen keycard or fob. If this happened, they would be able to access valuable inventory and private data indiscriminately. Their identity will be completely verified using a fingerprint scanner or facial recognition camera with AI technology.

By investing in these solutions, you can eliminate huge gaps in your security strategy without expending additional human labor resources.


Supply chain managers are hungry for solutions to prevent the losses associated with poor inventory control, which is why the solutions listed above are becoming integral to competition in logistics and e-commerce. Consider which of these tools will best bridge the gaps in your existing strategy and address the errors that continually occur.

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